# Samsung, Micron warn China’s Xian lockdown could disrupt memory chip manufacturing Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2021-12-30 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Samsung and Micron Warn of Chip Manufacturing Disruption in Meta Description: Samsung and Micron, two major memory chip makers, caution about disruptions due to COVID-19 curbs in Xian, affecting supply chains and chip production. URL: https://financedigest.com/samsung-micron-warn-chinas-xian-lockdown-could-disrupt-memory-chip-manufacturinghtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2021-12-30t051853z1lynxmpehbt033rtroptp4southkorea-politics-1736836525995-compressed.jpg) By Joyce Lee and Manya Saini (Reuters) -Samsung Electronics and Micron Technology, two of the world’s largest memory chip makers, warned that strict COVID-19 curbs in the Chinese city of Xian could disrupt their chip manufacturing bases in the area. The lockdown in the city puts further pressure on global supply chains and adds to a torturous year for exporters facing sharply higher freight costs even as prices for raw materials including semiconductors skyrocket amid the pandemic. The curbs could cause delays in the supply of DRAM memory chips, widely used in [data centres](https://www.financedigest.com/keysource-awarded-major-contract-to-design-nationwide-network-of-data-centres-throughout-china.html "KEYSOURCE AWARDED MAJOR CONTRACT TO DESIGN  NATIONWIDE NETWORK OF DATA CENTRES THROUGHOUT CHINA"), Micron said on Wednesday. The stringent restrictions, which went into effect earlier this month, may be increasingly difficult to mitigate and have resulted in thinner staffing levels at the manufacturing site, Micron added. Samsung Electronics also said on Wednesday that it would temporarily adjust operations at its Xian manufacturing facilities for NAND flash [memory chips](https://www.financedigest.com/u-s-considers-crackdown-on-memory-chip-makers-in-china.html "U.S. considers crackdown on memory chip makers in China"), used for data storage in data centres, smartphones and other tech gadgets. Seoul-based analysts said [chips made in Samsung’s Xian NAND plant](https://www.financedigest.com/intel-wants-5-billion-more-in-german-subsidies-for-chip-plant-bloomberg-news.html "Intel wants billion more in German subsidies for chip plant – Bloomberg News") mainly go to China with limited shipments heading overseas. Some of the [biggest demand for the kind of chips](https://www.financedigest.com/japans-factory-output-posts-biggest-fall-in-8-months-on-weak-autos-chips-sectors.html "Japan’s factory output posts biggest fall in 8 months on weak autos, chips sectors") made in the plant come from Chinese server companies, they added. [Chinese officials have imposed tough curbs](https://www.financedigest.com/were-going-to-be-free-chinese-cheer-as-covid-curbs-are-loosened.html "‘We’re going to be free’: Chinese cheer as COVID curbs are loosened") on travel within and leaving Xian from Dec. 23, in line with [Beijing’s drive to immediately contain outbreaks](https://www.financedigest.com/as-beijing-battles-outbreak-china-warns-zero-covid-doubters.html "As Beijing battles outbreak, China warns ‘zero COVID’ doubters") as they appear. The COVID-19 outbreak in Xian is the [biggest seen by any Chinese city this year](https://www.financedigest.com/uk-nurses-begin-biggest-strike-ballot-in-more-than-100-years.html "UK nurses begin biggest strike ballot in more than 100 years"), with over 1,100 cases in total during the latest flare-up. We are tapping our [global supply](https://www.financedigest.com/oil-prices-steady-on-uncertain-global-outlook-and-supply-concerns.html "Oil prices steady on uncertain global outlook and supply concerns") chain, including our subcontractor partners, to help service our customers for these DRAM products,” Micron said in a blog post https://www.micron.com/about/blog/2021/december/micron-statement-on-current-situation-in-xi-an-china. We project that these efforts will allow us to [meet most of our customer demand](https://www.financedigest.com/meeting-both-operational-and-customer-demands-how-insurance-can-adapt-in-a-disrupted-world.html "Meeting both operational and customer demands – how insurance can adapt in a disrupted world"), however there may be some near-term delays as we activate our network,” the company said. Micron added that it was [working to minimize the risk](https://www.financedigest.com/combating-the-security-risk-of-remote-working.html "Combating the security risk of remote working ") of virus transmission and had employed measures including physical distancing and on-site testing and was encouraging vaccination. Samsung’s memory chip operation in Xian is one of the largest [foreign projects in China](https://www.financedigest.com/first-foreign-covid-vaccines-head-to-china-from-germany.html "First foreign COVID vaccines head to China from Germany"). The tech giant has two production lines in Xian making advanced NAND Flash products, which account for 42.5% of its total NAND flash memory production capacity and 15.3% of the overall [global output](https://www.financedigest.com/toyotas-july-global-vehicle-output-drops-again-puts-annual-target-in-doubt.html "Toyota’s July global vehicle output drops again, puts annual target in doubt") capacity, according to analysis provider TrendForce. Samsung said in a late October earnings [call that it had entered the July-September quarter with low](https://www.financedigest.com/monte-dei-paschis-cash-call-93-covered-so-far-despite-low-shareholder-take-up.html "Monte dei Paschi’s cash call 93% covered so far despite low shareholder take-up") inventory of NAND chips, and intended to normalise levels during that quarter. It is expected to announce October-December [earnings results](https://www.financedigest.com/astrazeneca-lifts-2022-earnings-outlook-as-cancer-drugs-boost-results.html "AstraZeneca lifts 2022 earnings outlook as cancer drugs boost results") in January. (Reporting by Manya Saini in Bengaluru, Joyce Lee and Heekyong Yang in Seoul; Writing by Shri Navaratnam; Editing by Maju Samuel and Himani Sarkar) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---