A new semiconductor fabrication plant in China could upend the DRAM and NAND industries:
Tsinghua Unigroup, one of the many tentacles of the Chinese state-controlled Tsinghua University, announced that it is investing $30 billion to build a new DRAM and NAND fab in Nanjing, China. The development comes as the company seeks to rapidly expand after its 51% buy-in of Yangtze River Storage Technology, which recently announced a separate $24 billion DRAM and NAND fab in Wuhan, China.
The NAND industry is falling deeper into the largest shortage in its history, and many industry analysts predict that we will experience yet another DRAM shortage in the coming months. Both the NAND and DRAM industries have consolidated down to a few key players, and predictable production output has kept supply and demand dynamics largely balanced for several years. However, a rash of 3D NAND developmental delays have delayed major players, such as SanDisk, Toshiba, SK hynix, and to a lesser extent Intel and Micron, from reaching production projections. These delays are the catalyst for the current shortage, but the entrance of the potentially unpredictable Tsinghua could upset the delicate supply balance, thus causing an eventual glut. The staid semiconductor industry would rather weather shortages than the margin-killing gluts, so the Tsinghua developments are concerning for the established players.
Additional coverage at:
http://www.reuters.com/article/us-tsinghua-plant-idUSKBN1532ED
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