Samsung's Chips Are Down

Samsung, the world's top maker of memory chips, has recently taken a backseat to its competitors. The company was bumped from its first place spot after being forced to shut down six of its chip production lines due to a power outage at a Seoul plant.

Are your favourite electronic devices at risk?

Likely, since the plant in question produces dynamic random access memory (DRAM) chips, NAND flash chips, and non-memory chips. Many of the gadgets and appliances that we use on a regular basis, such as personal computers, digital cameras, and music players, rely on these chips. (Source: today.reuters.com)

A main factor that could work in favour of Samsung's rivals is price. According to an analyst at an investment and security company, "When a line is stopped it has to be stabilized and returned to normal. The NAND flash market is small, and any supply disruption will be reflected in the prices." (Source: news.zdnet.com)

As a result of the outage shares in rival memory chip makers, such as Toshiba, have risen. In addition, Samsung's supply of memory chips may now be reduced.

The possible consequences?

The fate of Samsung's memory chip depends on the amount of time required to get production lines back up and running. A Samsung representative recently stated, "We believe that it will take at least one month to begin production again at these lines as the company will have to clean out damaged equipment and it is likely to take at least one month to complete wafer production." (Source: news.zdnet.com)

Competitors may be able to sell more memory at higher prices, too. Consumer electronics makers may have to pay more for NAND flash, a slimmer form of flash memory that is predicted to one day take over a market once dominated by larger hard drives.