What you need to know
- Samsung experienced a one-minute power outage at its Hwaseong factory in South Korea that will shut down operations for two to three days.
- The factory is responsible for producing NAND and DRAM memory chips, which are used in products like phones and computers.
- A similar incident occurred in 2018 at a different Samsung factory and cost the company $43.3 million in losses, but it is estimated this blackout will cost significantly less.
You undoubtedly know Samsung for its line of smartphones such as the Galaxy S10 and Note 10, along with its TVs, microwaves, washers, and dryers. However, did you also know that Samsung is a major manufacturer of components that go into smartphones? In fact, Samsung is the largest memory chipmaker in the world.
Unfortunately, it looks like Samsung will be taking an unscheduled break at one of its factories thanks to a power outage. The outage occurred on December 31 when a power transmission cable exploded, knocking out power to a section of Hwaseong including Samsung factory where DRAM and NAND chips are produced.
The outage lasted no longer than a minute, yet Samsung says it will take two to three days to get operations running again. According to the report, none of the equipment was damaged, but the production line must still be inspected and all of the wafers in production must be discarded in case the power interruption caused any damage.
Samsung experienced a similar issue in 2018 at its Pyeongtaek factory, and that one cost the company 50 billion won ($43.3 million) in losses after a 30-minute blackout. Subsequently, we saw prices for DRAM and NAND memory chips increase, showing that even a minor power interruption can be very costly.
The extent of the losses for the Hwaseong power outage is currently unknown, but it is estimated to be in the "few billion won range." Prices for DRAM and NAND chips aren't expected to be affected as much in 2018, though, as Samsung is currently sitting on a stockpile of memory chips.
And they'll use it as an excuse for price fixing for at least 6 months.
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