A 0.07-Second Power Problem at Toshiba Chip-Plant May Affect Digital Device Availability/Prices

There was a Wall Street Journal news story (among others) this morning reporting that "there was a sudden drop in voltage that caused a 0.07-second power interruption at Toshiba's Yokkaichi memory-chip plant in Mie prefecture" causing a problem which Toshiba said will reduce its shipments of NAND flash memory by 20% for the next two months. This, the Journal article says, would translate into a 7.5% reduction in world-wide shipments through February.

NAND memory is used in everything from USB flash drives to MP3 players to digital cameras to smartphones and tablet PCs.

According to the WSJ, Toshiba is the second largest supplier of NAND flash memory, with 35.4% of the world's market. Samsung is the leader with 39.8% of the market.

The WSJ article also says that apparently the uninterruptible power supply system at the Toshiba plant failed when the region was hit by a drop in voltage, causing the chips being fabricated to be ruined. Toshiba's press release dated today says:

"Toshiba Corporation has announced that Yokkaichi Operations, the company's memory production facility in Mie prefecture, returned to close to 100% normal operation at 15:00 on December 10. This marks the recovery from the stoppage of part of the facility's fabrication equipment caused by a momentary drop in voltage at 5:21AM on December 8."

"Toshiba is currently confirming the impact of this incident and will seek to minimize impacts on its customers."

There is some debate about whether the reduction in NAND flash memory chips availability will mean short-term price increases and device shortages, and if so, by how much. Some analysts don't expect Apple to be affected much if at all, and some others expect Samsung to pick up the slack in chip availability. Holiday supplies of devices using the chips are not likely to be affected, although it may mean that post-holiday price discounting of unsold digital devices may not be as aggressive as in the past.

However, if you are looking for any excuse to use to buy that digital device you wanted sooner rather than later, this incident may be a sufficient one to help rationalize your decision.

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