The Western Digital Corporation (NASDAQ: WDC) warns of contamination at two of its flash memory fabrication plants that it operates in a joint venture with Kioxia Holdings. The contamination will affect both companies' inventories, further pinching the tech sector as the global chip shortage continues.
"Contamination of certain material used in [flash memory] manufacturing processes has occurred and is affecting production operations at both its Yokkaichi and Kitakami joint venture, flash fabrication facilities," Western Digital announced through BusinessWire. "Western Digital's current assessment of the impact is a reduction of its flash availability of at least 6.5 exabytes. The company is working closely with its joint venture partner, Kioxia, to implement necessary measures that will restore the facilities to normal operational status as quickly as possible."
6.5 exabytes is a pretty steep figure and comes at the worst possible time for the tech sector. One exabyte is equal to 1 billion gigabytes, meaning that around six and a half billion gigabytes of memory are unusable, per Western Digital's figures. If Kioxia's stock is contaminated to the same degree, 13-14 billion gigabytes of flash memory could be useless.
That being said, it might be wise to take better care of your current smartphone to keep it going a bit longer.
Western Digital and Kioxia's joint venture produces NAND memory, most commonly used in techs like SD cards and smartphones.
Both companies have announced that work is already ongoing to restore production. Still, given the massive inventory loss, ongoing supply line issues, and existing shortages, the cost of related products is likely to rise. Unrelated to the silicon wafers that are currently short in most markets, this means that current efforts to negate the shortage, including Intel's planned mega fab in Ohio, won't offset the contamination losses.
It looks like Western Digital investors might have been spooked a little by the announcement. Despite a mid-morning jump, shares slid 0.71% on Thursday, likely in reaction to the company's after-hours announcement Wednesday evening. Shares recovered 1.4% by early afternoon on Friday but were sliding into a negative trend to take WDC's stock underwater again potentially.