Big trouble in China, but it's not what you think.
Never underestimate the power of a disaster on the other side of the world to make our toys cost a little more. And by disaster, we could be referring to an event as seemingly insignificant as a power blackout, as recently occurred at one of Hynix’s Chinese memory fabs.
On the 19th of May, the company reported that a plant, based in Wuxi, Jiangsu Province, had experienced a cessation of production due to a power blackout. The factory accounts for approximately 45% of Hynix’s overall DRAM production, producing a whopping 160,000 DRAM chips per month. As a result of the closure, Hynix initially estimated it had lost approximately US$16 million worth of revenue, but this was later revised to a lower amount.
However, the short closure of the plant has been enough for a predicted price rise of Hynix memory in the month of June. When combined with the annual Computex-driven frenzy of hardware purchases, Hynix memory is anticipated to increase in price by around 5 to 10% in the month of June.
You’ve probably guessed that the power failure was associated with the recent Chinese quake, but you’d be wrong. According to Hynix, the problem lay with a regional sub-station that experienced a failure.
In fact, despite the widespread devastation in China from this month’s earthquake, there appears to have been very little disruption to hardware manufacturing as a result of the earthquake. This is due to the fact that most Chinese-based factories are located on the Eastern coast, far from the west coast epicentre of the earthquake.
Disruptions in the supply chains caused by the earthquake could lead to a slight delay of some components, but overall the effect of the quake on PC hardware is expected to be minimal. It’s nice to hear at least one minor piece of good news out of the devastation of the Chinese quakes.