Micron Faces DRAM Dilemma: Taiwan Earthquake Disrupts Chip Supply

Micron Technology Inc., a leading memory chip manufacturer, has announced that the aftermath of the April 3 earthquake in Taiwan could decrease its dynamic random access memory (DRAM) production by up to a mid-single digit percentage in a calendar quarter.[1] This disruption is concerning as DRAM is extensively used in data centers, personal computers, smartphones, and other computing devices.

Micron operates in four locations in Taiwan, which plays a significant role in the global chip supply chain.[1] The earthquake raised concerns about potential disruptions to the company's DRAM production. Micron stated that it was not yet at full production following the earthquake but assured no long-term impact on its DRAM supply capability.[1]

The impact on Micron's HBM (high-bandwidth memory) chips, which are a stacked DRAM technology used in AI applications, is still unclear. Micron has not yet specified whether its HBM supplies will be affected by the earthquake.[1]

The disruption to Micron's DRAM production comes at a time when the company's chips are in high demand, with its HBM chips already sold out for 2024 and a majority of 2025's supply allocated.[1] This could lead to higher prices for DRAM memory products, as suggested by analysts.[2][5][6]

Overall, the earthquake in Taiwan has posed a challenge for Micron's DRAM supply, which could have ripple effects on various industries that rely on these memory chips. The company is working to mitigate the impact and ensure a stable supply in the long term.[1]

Citations:
[1] https://www.reuters.com/technology/micron-flags-hit-its-dram-supply-taiwan-earthquake-2024-04-11/
[2] https://www.bloomberg.com/news/articles/2021-10-25/micron-shares-gain-as-analysts-see-higher-prices-from-earthquake
[3] https://www.nature.com/articles/s41467-022-29044-7
[4] https://www.digitimes.com/news/a20240102PD215/japan-earthquake-ic-manufacturing-tsmc.html
[5] https://www.barrons.com/articles/micron-stock-taiwan-51635181972
[6] https://www.marketwatch.com/story/micron-stock-rallies-after-analysts-say-production-impacts-from-recent-earthquake-could-help-pricing-11635181146