Power outage halts Samsung's flash memory production, shortages expected
By Darren Murph 
posted August 3rd 2007 2:27PM
posted August 3rd 2007 2:27PM
Samsung, the worldwide leader in flash memory production, has been forced to "shut down six of its chip production lines after a power outage occurred at a plant near Seoul," and while recent reports suggest that "operations should be restored within a day," the lasting effects could linger on for quite some time. Reportedly, the outage occurred at Samsung's Giheung complex and disrupted production of flash memory, DRAM, and logic chips, and while this may not sound too significant to the average outsider, estimates are already pegging losses at around $54 million. Notably, Samsung wouldn't say whether or not the hiccup will affect supplies of memory chips to Apple (one of its top customers), but analysts are already purporting that we could see "a severe shortage of NAND chips" and increased prices in the coming weeks.[Thanks, Patrick M.]
Read - Samsung Electronics chip output hit by power cut
Read - Samsung operations should be restored within a day
Have Samsung done things like this in the past, in order to drive up chip prices?
Yes Samsung is a convicted price fixer... i wouldnt put this past them...
So a one day power outage resulted in so much memory not being produced that we might have a shortage. That sounds crazy! $54 Billion??? You might want to correct that to be $54 MILLION USD. It was $50 Billion Korean.
Ed
For those wondering how the plant going down for one day can result in such a huge loss, all the chips in the production process have to be discarded, not just those that would have been finished today. It takes more than one day to make a chip.
This is BS. Shit like this ALWAYS happens when prices get too low. 10 years ago when the prices of SIMMS were dropping, there was suddenly a shortage of the plastic to make the cases for the chips, then a few years later they claim "earthquake damage" etc...
A single days loss of production will be expensive, but it won't cost them $54 billion. It will force them to claim prices are rising again.
54 Billion seemed a bit steep. It should read 54 million, still high, but makes more sense!
Yea I would have to agree.
Maybe I'm looking at this the wrong way. But lets say the plant didn't have power for one day and they couldn't produce anything. If that costed them 54 billion, then wouldn't that imply that, that single plant outputs 54x365=19.7 TRILLION dollars yearly? I don't think that is possible, even for samsung.
apc
Don't they have backup generators?
/don't they produce their own electricty?
How inefficient, this is pretty common in Canada... I mean, factories relying on a different source of energy.
For instance, the local chlorine plant relies on an hydrogen generator (yes, hydrogen) to produce 70% of its energy needs, and the kraft paper plant generates its own energy from their waste.
The amount of electricity a semiconductor fab uses is incredible. It would take banks of generators to keep it up.
Don't forget that when you loose power to a plant like this
1) you loose the current production run
2) you have to reset all the equipment (re pump down all the vacuums ect)
3) Re qualify all the equipment for production
Also depending on what type of testers are used in testing the equipment, there can be damage that is caused by the robots loosing power ect.
This is correct. It can take a week or more to reset the machines.
This is plain dumb, $54 billion? If that was the case, the fabs would have anticipated the cost and build their own friggin' power station.
The Reuters article was correct, Patrick N. is dyslexics.
I think you mean "dyslexic". ;-)
Is this due to the epic floods in Asia from the recent monsoons?
According to fabtech, the losses are estimated at 54 million, not billion.
http://www.fabtech.org/content/view/3222/2/
HAHA......I could just see Steve Jobs wearing a ski mask and makeup and chopping down the power pole next to the plant. This would cause a shortage of IPHONEs and drive people into a frenzy to buy one.
Once again this kind of thing happens, and we just suck it up. Oil prices, RAM prices. Anything that gets too low in price, and suddenly the facilities to make it blow up. THAT'S AWESOMELY CONVENIENT! Nevermind the fact that a 54 million dollar (I'm using that number because 54 billion is insane) is not that big a hit when you're talking about a commodity item. Spin it however you want the prices are only rising because they found a convenient excuse.
It's $54 million on the Read link.
$54 Billion? Gizmodo.com says $54 MILLION.
Somebody needs to re-check their numbers!
As people have stated yes its 54 Million USD..
Second they consume WAY too much power and Samsung is very integrated with the Korean Govt so there is no need to build thier own power. They do have their own substations but if the main grid goes dark they are screwed.
There is PLENTY of backup power but that is not ment to sustain fab production.
a LARGE part of the cost is not necessarly product lost but cost of consumables on the equipment. Going to some EXTREAMLY unhappy techs this weekend.. TONs of wetcleans. Any kind of dep or etch tool is going down for a wetclean now.
Its not as simple as hitting start when the power comes back I figure it will take ATLEAST a week before most of the tools are back online and qualified for production. There will be some tools that most definatly have particle problems that will take much longer to qualify.
The product in loop will for the most part be scrapped or at best case have to be reworked some which is a labor and time intensive process.
The facility is not designed to cope with every tool needing a wetclean and consumables replaced at the same time either so that further complicates things.
I fully anticipate alot of robot errors as well when then tools come back up.. NOT a fun or cheap issue.
And yes Samsung does have a rediclious amount of capacity so loosing that many wafer starts will be a big financial hit.
warriorwithn,
I would take a pretty good guess and say yea Something like Samasung line 10 for F-fab mostly likely uses a considerable larger amount of power. You have to realize almost every step outside of CMP requires an RF generated Plazma. We are talking thousands of volts per chamber. Some areas using 10kv DC power. typical low-power etch tool is using about 600amps of 208 to run only 3 chambers. Now figure just etch alone at like F-line there is ~350 chambers. Forget about the implant tools. Those things are INSAINE when it comes to power consumption..
So yea after a little thought I am positive Samsung uses way more power.
Yeah...they are just taking a lesson from the furcking gasoline companies...I hate it when someone does something really obvious like this, and then claims something like a power outage is making them lose money. Do they not have a DR plan? n00bs!!!
sure they have DR plans, and $54M USD is not that much in a business such as chip production. It is mainly a matter of time that will get everything back on schedule. The price increase is probably only a few cents per chip which would only produce a modest increase for a short period of time.