As you might be aware, a fire broke out at the SK-Hynix factory in Wuxi on the afternoon of September 4th 2013. The Wuxi factory production capacity was approximately 150,000 pcs/month for 12-inch wafer. The fire destroyed 100,000 pcs of DRAM wafer. It will take approximately six months to recover from the damage.

Before 2012, the main production at this factory was for DRAM. Affected by the declining on PC and other businesses, SK-Hynix moved 20,000pcs production capacity to 12-inch to NAND Flash products. Since that time, smart phones, tablet PCs and other mobile products have rapidly developed. Samsung, SK-Hynix, and Elpida are now the main suppliers for LP DDR series products. The Wuxi factory produced LP DDR DRAM products and NAND Flash products, the capacity remained at about 20,000pcs-30,000pcs. Now SK-Hynix will give first priority to ensure Apple’s order and this will have a big influence on Chinese mobile phone market. That may lead to market volatility and more orders may go to the competitors of SK-Hynix, namely Samsung, Elpida and Micron.