NAND market impacted by disruptions at Yokkaichi, Kitakami fabs

Western Digital (WD) and Kioxia have announced disruption at their joint venture Yokkaichi and Kitakami flash fabrication facilities due to contamination of certain material used in the manufacturing process. (WD announcement, Kioxia announcement)

WD quantified the impact on flash availability at 6.5 exabytes (EBs). Although Kioxia did not quantify, Omdia is led to believe the 6.5EBs is just WD’s loss, meaning Kioxia’s loss could be roughly the same if not more as they have majority share of the bit output from the fabs.

Omdia’s best research estimation, with the two together, is approximately 13.5 – 14.0 total EBs lost. For WD/Kioxia, this would be about 23%-24% of their total 1Q22 NAND bit output. Industry-wide, this accounts for about 8%-9% of total NAND bit output.

The impact to the end markets is difficult to quantity at this point. Inventory levels (both at the manufacturers and in the end markets) will be key to help absorb any of the factory loss. The NAND market has been in slight oversupply, and prices have been in decline, which would suggest that there is inventory. However, now accounting for the loss, supply and demand could return to relative balance for the rest of the quarter. Mobile market storage inventory has been believed to be healthy.