Recently, Samsung Electronics announced the production launch of the first phase of its Xi’an Phase II factory, and the full-scale construction of Phase II has begun, seemingly marking the start of a new round of production expansion competition.It is reported that SK Hynix also plans to increase its NAND Flash and DRAM production capacity.
According to DIGITIMES,SK Hynix may recently invest in equipment for its Wuxi C2F factory to add a DRAM production line in the idle space, with a monthly capacity of about 30,000 wafers, and the equipment installation is expected to take place in Q3. At the same time, SK Hynix will also increase NAND Flash production capacity at the M15 factory.
The SK Hynix factory located in Wuxi, China (C2F) was completed in April 2019 and is primarily used for producing advanced 10nm-class DRAM technology, with an estimated full-load monthly capacity of 180,000 12-inch wafers. The SK Hynix M15 factory began production of 3D NAND in 2019. Previously, due to market oversupply, SK Hynix reduced its NAND Flash wafer production by more than 10% in 2019 compared to 2018, which also slowed the ramp-up speed of the factory’s capacity. Now, stimulated by Samsung’s accelerated investment, SK Hynix may also be considering increasing its production speed.
Additionally,in 2020, SK Hynix may also accelerate the operation of the Lichuan M16 factory. Sources indicate that SK Hynix is coordinating with equipment suppliers for early delivery, and equipment may be stored by the end of 2020, with mass production expected to begin in early 2021.
Recently, there have been continuous reports of original manufacturers expanding production. The reason for the original manufacturers’ intention to increase investment is that in 2019, Samsung, SK Hynix, Micron, and others collectively reduced production, while Kioxia/Western Digital suffered capacity losses due to power outages, leading to a shortage of NAND Flash supply in some markets starting in the second half of 2019. Although the “pandemic” impacted 2020, the “stay-at-home economy” further drove the demand for storage in data centers and enterprises, coupled with the high-value market, which can compensate for the decline in global consumer market demand, prioritizing the supply of original manufacturers’ capacity.
Furthermore, after the “pandemic,” China’s manufacturing industry has accelerated its recovery, with the important manufacturing resumption rate stabilizing at around 90%. People’s lives have gradually returned to pre-pandemic levels since April, boosting consumer spending. Additionally, Apple’s iPhone online channels have seen price reductions, and the enthusiastic pre-orders for the iPhone SE 2 have stimulated the first wave of domestic demand, along with the shopping demand expected during the May Day holiday, indicating a promising outlook for domestic market demand. This is also an important factor for Samsung and SK Hynix to increase production capacity at their factories in China.
Moreover, countries and regions in Europe, America, and Southeast Asia are also looking to stimulate their economies starting in May. For example, the United States has developed a comprehensive resumption plan, India plans to resume some manufacturing production from April 15, and countries such as Japan, South Korea, the Philippines, and Thailand are also considering restarting their economies. If these measures are effective, overseas orders are expected to restart capacity, and the overall market situation is expected to improve compared to before, but close attention must still be paid to the development of the “pandemic.”
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