Samsung’s memory plants in China face uncertainty as Xi’an lockdown adds pressure to chip supply chain
- The South Korean memory chip giant could face logistical issues due to the lockdown measures, and experience delays in shipments, according to research firm
- The two Samsung fabs in in Xi’an account for 42.5 per cent of the company’s total NAND flash production capacity and 15.3 per cent of the global total
Samsung Electronics’ memory chip complex in Xi’an, one of the largest foreign-funded projects in China, is in the spotlight after the city tightened its lockdown measures on Monday following 150 new Covid-19 cases on Sunday.
While there are no reports of suspended production at the US$26 billion complex run by the South Korean tech giant in the capital city of Shaanxi province, its operations have been closely watched since Xi’an introduced a strict citywide lockdown two days before Christmas, suspending most forms of transport.
Samsung “could face logistical issues related to the Xi’an lockdown in the near future and experience delays in shipments”, research firm TrendForce said in a report last Friday.
A report from South Korea’s Yonhap News Agency cited a Samsung official on Friday saying that emergency measures taken at the Xi’an site have “not affected production as it has been fully utilising factory workers living in the company’s dormitory.”
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Samsung has taken preventive measures, such as having essential workers stay in the on-site dormitories in case the lockdown continues, and is consulting Chinese authorities on ways to continue production, Yonhap reported.
The South Korean technology giant did not immediately reply to a request for comment. A public relations director with Samsung China declined to comment.
The Xi’an Market Regulation Administration bureau responsible for overseeing business registration of the Samsung factory did not answer phone calls seeking comment.
Covid-19 controls in Xi’an intensified on Sunday as all roads, buildings and even open spaces in the city of 13 million were subject to disinfection.
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Residents were given short notice on Sunday afternoon that a “full-scale” deep cleaning would start at 6pm to “further improve the prevention and control of the epidemic, and effectively protect the health and life safety of the people”, according to an official statement.
Samsung has two memory wafer fabrication plants in Xi’an, producing 3D NAND flash products, with both facilities employing more than 3,300 workers combined, according to TrendForce and company information.
The Seoul-based company opened the first fab in 2014, while the second began operating in March 2020. Expansion plans are underway, with additional capacity expected to enter production in the second half of this year, according to information from the Shaanxi government.
The output of the two fabs combined account for 42.5 per cent of Samsung’s total NAND flash production capacity and 15.3 per cent of the global total.
The Xi’an city government imposed a citywide lockdown on December 23 to contain a local outbreak that has since infected more than 400 people. Residents are prevented from leaving their residential areas without a negative Covid-19 test result valid within 48 hours after the sampling, and a community-issued pass.
