Just a few days ago, the WD factory reported a contamination problem in the NAND Flash creation processes, where apparently a huge number of Exabytes had been affected and had to be removed from said production. Well, today WD reports that luckily the products that had been finished have not been affected, but the contamination is going to move the foundations of the company based on a price increase in its products.
It is neither the first nor the last time that a company is going to have contamination problems in its FABs, but perhaps rarely can it be said that this affects prices, much less that it can drag down an entire industry. The statement about the component that contained impurities has been followed by another even more catastrophic statement from the brand, where expectations are not good.
Finished products are safe, but…
Western Digital and Kioxia are going to face this 2022 in the worst way: raising prices to compensate for the losses. But this price increase could undoubtedly make the industry take the opportunity to match above and earn more when a rival is depleted.
Now it is not a matter of selling more units, but of making more money with them, since the industry and users are in conflict over hardware prices and fewer and fewer PCs are being assembled. In this situation, competing for price is an option, but also doing it below those prices that are on the rise is a way to be competitive and generate higher income.
And it is that jerry cagleexecutive vice president of WD’s global customer organization has released an internal and external statement announcing the worst possible news.
The damage is still being assessed: the price of WD SSDs will go up
WD’s statement was clear: the significant short-term cost It supposes the increase of the prices of all the products that use Flash and immediately. The problem as such is not this, it is the impact that this movement creates in the long term for the company, which according to what it says is being evaluated.
The first shot was W.D., Kioxia will continue to trail behind and as both companies have lost approximately one 10% of world productionBecause of this contamination, the supply will be reduced in a similar proportion. For this reason, it is speculated with what was mentioned above: an excuse to gradually increase prices upwards, staying just below both companies to increase profits and be equally competitive taking advantage of the situation of WD and Kioxia.
Therefore, the last order that left the factories will be the one that possibly maintains the price prior to the disaster that occurred. From there we could see an escalation of prices that do not benefit users, these already greatly reduced by key components such as processors or graphics cards. Bad start 2022, we’ll see how it ends.
