Samsung Electronics Reduces Production Lines at Xi'an Semiconductor Plant in China... "Flexible Operation"

Restrictions on Personnel and Material Movement Due to City Lockdown... Production Adjustment Inevitable

Samsung Electronics semiconductor factory located in Xi'an, China (Photo by Samsung Electronics)

[Asia Economy Reporter Lee Hye-young] Samsung Electronics has begun adjusting production volumes, including partially scaling down the production lines at its semiconductor facility in Xi'an, China, where a city lockdown has been imposed due to the spread of COVID-19.

On the 29th, Samsung Electronics stated, "As the spread of COVID-19 continues, we are flexibly adjusting the production lines at our semiconductor facility in Xi'an, China." The company added, "This is in accordance with our management policy that prioritizes the safety and health of our employees. We will do our best to ensure there are no disruptions to customer service by preparing multifaceted measures, including linking global production lines."

Although most factories in Xi'an have halted operations due to the lockdown, Samsung Electronics' plant had maintained normal operations considering the characteristics of the semiconductor industry. However, as the lockdown prolonged and the movement of personnel and materials became impossible, entering an emergency system involving partial scaling down of production lines became unavoidable.

The streets of Xi'an city in Shanxi Province, China, which was completely locked down due to the spread of COVID-19, are empty. [Image source=Yonhap News]

Samsung Electronics' only overseas memory production bases, Xi'an Plants 1 and 2, are known to produce 250,000 NAND flash wafers per month. This accounts for 42.5% of Samsung Electronics' total NAND flash production and 15.3% of global production.

Because of this, industry experts predict that the reduction in production lines at the Xi'an plant could increase price volatility. Earlier, semiconductor market research firm TrendForce commented on the Xi'an lockdown situation, stating, "Samsung Electronics has cleared most of the memory semiconductor shipments from the Xi'an plant from the end of this year to mid-January next year," suggesting there would be no major disruptions. However, they also explained, "If shipments are delayed due to logistics issues, it cannot be ruled out that the price decline of NAND flash memory will narrow."

A Samsung Electronics official emphasized, "Due to difficulties in logistics and personnel movement, we have no choice but to operate flexibly by adjusting production volumes. We will conduct multifaceted reviews to ensure there are no disruptions in semiconductor supply by linking production lines such as those in Korean plants."

This content was produced with the assistance of AI translation services.