11-12-2020 | | By Sam Brown
Recently, Micron reported a power outage at one of its memory production facilities, and the result was a sudden increase in share prices. What technologies do Micron develop, what happened during the power outage, and why is it newsworthy?
Micron is an American semiconductor company that specialises in memory technologies such as SRAM, RAM, and FLASH. Founded in 1978, Micron has over 40,000 employees and yearly revenue of $21.44 billion with offices located around the globe. Micron not only designs semiconductor devices, but they also manufacture them and are responsible for 20.7% of the world’s production of DRAM, meaning that their position in the market is critical.
Recently, a Micron production facility in Taiwan suffered a power outage for one hour. For most businesses, this would be inconvenient with resulting employees most likely taking an additional break. However, semiconductor manufacturing facilities are anything but laid back, and the loss of power, even for just one hour, proved detrimental.
The facility that suffered the power outage is responsible for 10% of the worlds DRAM devices, including DDR4 and LPDDR4 at 10nm. Each month, the Taiwan facility produces approximately 125,000 wafers. While a single power outage for an hour may not seem that bad, it can be disastrous for carefully controlled processes such as those used in the semiconductor industry.
Exactly details behind the extent of the damage caused by the power outage are not clear, we can, however, make some basic estimations to the extent of production losses. Assuming that such a facility operates 24/7 due to the precise and sensitive nature of production, the loss of power for just one hour in a month would result in the loss of around 4000 wafers (assuming 30 days in a month).
We can go further and try to get a ballpark figure of how may memory ICs that equates to. Using average die sizes of around 2.13mm x 2.13mm using 65nm technology (much larger than the 10nm process by Micron), and a wafer size of 200mm provides an approximate 5700 dies per wafer. Therefore, the total number of devices lost from one hour of no production is 2.28 million ICs. However, this assumption works on the basis that during the one-hour power outage, devices that were being worked on could be salvaged and that wafers are made one at a time (in reality, this number could be far greater). We also know that this may not be the case due to a statement released by Micron saying:
“We estimate that the factory will return to normal production in the next few days.”
This suggests that as much as three days’ worth of manufacturing has been lost, thus providing a lower estimate of 100 million devices (again, based on the assumption of only producing memory, using chips of 2mm x 2mm, on a 200mm wafer).
The result of this power outage is the rise in the value of Micron stock by 2%. While this may not seem like much, a 2% increase of a company whose value is in the tens of billions easily provides a valuation increase in the hundreds of millions. But, the reason for the increase in valuation comes from the companies 10% stake in the memory market. Any disruption in the production of semiconductors can lead to shortages, and thus price hikes from the manufacturers.
While there are many semiconductor manufacturers globally, it is often the few that produce the most needed devices (such as TMSC and Intel). This is often a result of only a few companies having access to the latest node sizes, and therefore any disruption in any one of these companies can send ripples through the market. The same was seen with the gradual decline in Intel valuation as a result of losing customers to AMD who outsourced their fabrication instead of linking their technology to their node.