Two of Apple’s SSD suppliers, Western Digital and Kioxia were faced with a disaster at one of their major NAND flash production sites. The facility has had to scrap 6.5 exabytes worth of BiCS 3D NAND flash storage due to contaminated materials entering the production process. For context that is 6.5 billion gigabytes of SSD storage.
This is an industry wide disaster
SSD’s are used in a wide variety of products. From laptops, smartphones, PC’s, smartwatches and more. Even gadgets that you might not have considered contain small amounts of solid-state storage. For example, smart home accessories will have a small allocation of storage in order to save and run subroutines. The reason that the disruption at the Western Digital facility will be so far-reaching, is that according to Trendforce it accounts for around 30% of all global SSD supply. This could lead to as much as a 10% spike in the cost of SSD’s.
The technology industry and many adjacent industries such as automotive firms have been clobbered by the semiconductor shortage in the past two years. A lack of availability of parts combined with significant worker shortages caused by the pandemic has created a wave of operational disruption. Most firms are still battling the effects of these shortages but there were signs that supply shortages were starting to ease. Only yesterday Bloomberg reported that Apple’s supplier Foxconn was seeing significant improvements in the supply chain. But this new development at the Western Digital facility will have wide-reaching consequences for the entire industry.
Apple has been remarkably well shielded from the worst effects of the semiconductor shortage. But even it was somewhat impacted in the last couple of quarters. It isn’t clear at this stage what impact this latest news will have on the cost of Apple products. The supply of parts will be constrained which will drive up prices. Apple could choose to absorb those costs or pass them on to consumers. This story will likely play out for weeks if not months at which point we should have a closer idea of what Apple and others intend to do. One thing is clear though, it is more important than ever for Apple to have a wide range of suppliers (and especially SSD suppliers) moving forward.
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Featured image courtesy of Samsung.