Flash drive shortages ahead after major chip disaster

Hard drive giant Western Digital said a contamination issue in two of its Japanese factories severely impacted production, resulting in a loss of 6.5 billion gigabytes of flash storage. 

The company admitted the mishap in a Wednesday press release, revealing the contamination issue had effectively shut down two of its NAND production facilities. The incident will impact the availability of the chips that are vital to production of many electronic devices and serve as the primary component of solid state hard drives (SSDs).

Western Digital claimed to be working with its joint venture partner Kioxia (formerly Toshiba) to “restore the facilities to normal operational status as quickly as possible.” 

However, the two companies between them produce a whopping 30% of the NAND flash storage on the market, according to TrendForce. The company did not reveal what caused the contamination or whether products currently on the market will need to be recalled. It’s also unclear when the affected factories in Yokkaichi and Kitakami will be back online.

Indeed, with Kioxia revealing the incident also affected the more advanced BiCS 3D NAND flash memory production, buyers may try to stock up on whatever supply is already in retailers’ inventories, worsening the already dire global chip shortage sparked by the Covid-19 pandemic and subsequent supply chain issues. 

Market research firm TrendForce predicted a price spike of anywhere from 5% to 10% for NAND flash chips on Friday, as demand for the chips is unlikely to falter in the absence of sufficient supply. 

The chip shortage has cost the US economy hundreds of billions of dollars, and while local governments play catch-up funding stateside chipmaking factories, production lines sit idle as a growing portion of everyday consumer items require some form of chip to work. 

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US politicians have cited the perceived unfairness of an industry American manufacturers ‘invented’ having moved almost completely overseas, and many – including President Joe Biden – are belatedly pushing to bring chip production back to US soil. 

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