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Micron’s DRAM factory crashed: memory prices jumped up, followed by company stock
It became known that a power failure occurred at the Taiwanese Micron plant, the production facilities of which are used to create memory such as DRAM. Wells Fargo analyst Aaron Rakers reported this with reference to TrendForce data. Despite this, Micron shares gained 2% on the back of a more optimistic revenue forecast.
Micron factory incident could lead to reduced supply in the industry and higher spot prices (instant market value of chips). The power outage was reported to be “very short,” but the company has yet to assess its impact. The analyst notes that even “short-term interruptions in the operation of the plant can lead to disruption of industrial supplies.”.
Power-related failure occurred at Fab 11 factory in Taiwan, which is used to manufacture DDR4 and LPDDR4 RAM for computers and servers. The analyst notes that in the past, such events have led to a positive reaction to the trend of spot pricing, which has a beneficial effect on the DRAM industry.
Mizuho analyst Vijay Rakesh believes a “short-term” power failure at the Taiwanese Micron plant could exacerbate the DRAM shortage in the market. In his opinion, the “short-term” failure in the plant’s operation lasted more than an hour, and production could gradually return to normal. While DRAM spot prices could rise due to this incident, the analyst does not change his opinion that Micron’s share price will continue to rise.