A large section of the IT hardware industry is in disarray today as memory manufacturer Hynix suffered major chemical fires to two large fabrication plants in the city of Wuxi, China. At present there are no reports of fatalities, but authorities are assessing the causes of the fire and the health and environmental impacts of toxic smoke seen billowing out of the site. In the mean time the owners have announced that production has been suspended.
In the aftermath of the fire DRAM and NAND markets are waking up to the real possibility of a squeeze in shipments from the Far East over an extended period of time. Sales in the may have already been suspended due to accelerated purchases from companies eager to secure current contracts or move from Hynix to an unaffected manufacturer.
The Hynix Fabrications at the centre of the news are believed to be the chief suppliers of GDDR memory for performance-level NVIDIA graphics cards, with as much as 12% of global supply being dependant on its output. This will undoubtedly have an impact on channel sales and the eventual price consumers pay, and we reached out to UK retailer CCL Online for a brief assessment on the ramifications for your pocketbook.
Product Manager Tom Lamb was stark in his appraisal. "Its all going crazy at the moment, as nobody knows what the knock on effect is everyone is speculating and trying to make as much money as possible on what stock they have if there is going to be a shortage running into Q4" he said.
When quizzed on the products he thought would be impacted most, Lamb responded: "Pricing will be affected on this for numerous reasons, with the new iPhone eating up supply of chips compounding the effect. RAM, SSD [will also] be effected, depending on how production is shifted." Tablets, notebooks and desktops will also have problems. Price increases are likely to occur throughout the next 7-10 days as distributors run short of stock, with the amount depending on shipments from the Far East.
Lamb could offer some comfort to UK consumers however. "One blessing is most of the items to be sold to consumers as finished goods (laptops, tablets, desktops) have already been made and are on containers on the way to the UK already." Furthermore CCL are securing as much stock as possible to ensure that their customers are insulated from pricing fluctuations for as long as is feasible.
With markets proving to be erratic throughout the day, including some reports of sales being suspended as knee-jerk reactions spiked pricing, it will be many days before a full assessment can be made.
Source: TechPowerUp, BloomBerg. Image Credit: ChipHell Forums
