Earlier this week, Tom’s Hardware reported that Samsung suffered a severe manufacturing problem. The South Korean corporation’s Giheung factory, which contains its dynamic random access memory (DRAM) chips, had a production issue. Though the conglomerate has resolved the problem, it estimates that the cost of losing so many memory chips is in the millions
A Very Costly Problem
As of this writing, Samsung has not offered a detailed explanation of what happened in its manufacturing plant. However, Business Korea notes that the contamination affected the 200mm wafer fabs that the firm uses for its 1.x nm class DRAM. As the exposure came from the facility’s equipment, it reportedly damaged several batches of memory chips.
Samsung said that it identified the affected machinery and has corrected the issue. However, the firm believes that it will cost millions to clean up the affected area and replace the contaminated inventory. Moreover, a company insider told Business Korea that Samsung hasn’t determined the full cost of the accident.
As such, Samsung’s DRAM losses could be even greater than it currently forecasts.
TSMC Contamination Incident
Notably, Samsung is not the only large component maker to deal with a major contamination issue this year. In January, the Taiwanese Semiconductor Manufacturing Company (TSMC) encountered a similar production problem. The firm explained that it received a batch of substandard photoresist chemicals that got used in its production line.
As a result, the corporation unintentionally contaminated its wafers during the production process. Consequently, TSMC had to dispose of at least 10,000 of the 12/16 nm wafers it intended to use for AMD, Nvidia, and Huawei chips.
Because of the accident, the corporation cut $550 million from its Q1 2019 revenue forecast in February.
If Samsung suffers similar losses it will affect the company’s predicted recovery. Throughout 2019, the conglomerate has posted record losses due to plummeting sales in the semiconductor division. However, the company outperformed analyst estimates in the third quarter. Moreover, Samsung’s leadership offered guidance that its chip business would rebound in 2020 with a resurgence in global smartphone sales.
While there’s never a good time for a semiconductor manufacturer to lose a batch of components, Samsung’s contamination incident hit just before the pivotal holiday season. If the firm experiences supply line delays, the impact will be felt by smartphone makers like Apple, Nokia, and HTC.