By Miyoung Kim
SEOUL, Sept 4 SK Hynix Inc expects
to resume production of memory chips at its Wuxi, China, plant
shortly, the South Korean chipmaker said on Wednesday, adding
that a fire at the facility caused one minor injury but did not
cripple critical equipment.
Hynix said the fire raged for more than an hour. After an
initial assessment, the world's No. 2 maker of dynamic random
access memory (DRAM) chips said it found no "material" damage to
fabrication gear in its clean room at the plant, which produces
around 12 to 15 percent of global computer memory chips.
With global supplies of DRAM chips already tight, shares in
rivals Micron Technology Inc and SanDisk Corp
rallied after early reports of the fire. But the rivals' shares
pared gains after Hynix's update.
Micron shares were up 4 percent at $14.615 at midday, after
surging almost 9 percent at one point. Sandisk was up 2.3
percent at $56.60, after climbing 6 percent at its peak.
"Currently, there is no material damage to the fab equipment
in the clean room, thus we expect to resume operations in a
short time period so that overall production and supply volume
would not be materially affected," company representative
Seongae Park said in a statement.
"In addition, we expect that the majority of damage will be
covered through insurance."
The fire started at around 0750 GMT during chip equipment
installation and was extinguished in less than two hours, the
company said. The incident caused one minor injury, it said,
adding that it is still assessing exact damages.
Park said photographs showing towering clouds of black,
billowing smoke that circulated among blogs and news websites
made the fire appear worse than it actually was.
"While there are some pictures of the fab surrounded by
large dark smoke being circulated, please be informed that the
damage is not as severe as it seems," Park said.
"The smoke was created because the fire was concentrated in
the air purification facilities that are linked to the rooftop
of the fab."
Hynix, which commanded 30 percent of the memory chip market
in the second quarter, said the plant it has suspended produces
around 40 percent to 50 percent of its total DRAM output.
Any prolonged suspension could tighten the global supply of
DRAM chips, widely used in computers and mobile devices. DRAM
chip prices nearly doubled in the first six months of this year
due to tight supply.
Hynix competes with bigger rival Samsung Electronics Co
and the third-ranked Micron. Samsung had 32.7
percent of the global DRAM market in the second quarter and
Micron owned 12.9 percent, according to data tracker