Xian Lockdown & Samsung
On December 23, the Chinese government locked down the city of Xian, limiting its 13m population to only one resident per home allowed to go out for necessities each day. The lock down came in response to a round of testing revealed 127 new COVID-19 cases across 14 districts in the city, triggering the biggest lock down in China since the original Wuhan incident. The delta variant is still responsible for most of the new infections but such precautions are being taken to make sure that the Omicron variant does not take hold. All domestic flights in and out of the city were cancelled and all transportation routes have been closed.
Samsung’s (005930.KS) semiconductor fab in Xian has been affected and while shut down, the company did indicate that it was making ‘flexible adjustments’ to its production lines as it is now working with limited personnel. The plant, which produces ~40% of the company’s NAND flash is expected to continue to operate under limited conditions, but an extended lockdown could begin to affect NAND pricing into January, and a full line stop would take weeks to restart. Since the Chinese government has left the lock down timing as indeterminate, the effect on Samsung’s production and global supply has yet to be determined.
Samsung’s (005930.KS) semiconductor fab in Xian has been affected and while shut down, the company did indicate that it was making ‘flexible adjustments’ to its production lines as it is now working with limited personnel. The plant, which produces ~40% of the company’s NAND flash is expected to continue to operate under limited conditions, but an extended lockdown could begin to affect NAND pricing into January, and a full line stop would take weeks to restart. Since the Chinese government has left the lock down timing as indeterminate, the effect on Samsung’s production and global supply has yet to be determined.
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