Contaminated Western Digital flash storage could slow down the PC renaissance

Earlier this week, Western Digital alerted partners that contaminants managed to ruin upwards of 6.5 exabytes of storage resulting in 6.5 million terabytes of unusable flash storage.

Western Digital's partner Kioxia Corp also reported that it also suffered losses due to contaminated materials used in its flash-memory production line. Roughly a year ago, WD and Kioxia announced the fruits of a joint venture to produce their 6th generation 3D flash memory, and this week, the two gathered to potentially halt a resurgence in PC demand by shortening supply.

Between what WD claimed as losses and what Kioxia's is reporting, the two factories could be responsible for up to 16 exabytes of wasted NAND memory, resulting in a ten percent chunk of the flash market being erased for the quarter.

Despite their acknowledgment of the contaminants, neither WD or Kioxia have identified the contaminants nor their plan for getting their Yokkaichi and Kitamakmi plants back up and running at normal operational pace.

What we do know, thanks to a report from Bloomberg, is that,

Kioxia said its newer and more lucrative type of 3D flash was the product line impacted, and “the company does not anticipate that shipment of its conventional 2D NAND flash memory will be affected.”

A Kioxia spokesperson said that only part of 3D Nand production has been hurt. The company will continue to ship from inventory in the short term but shipments will be curtailed in the “near term."

As manufacturers attempt to navigate an ongoing chip shortage, many will now be hit with yet another supply chain issue for those dependent on WD and Kioxia flash memory such as Apple, Microsoft, Sony, Google, Ford and many others.

With WD and Kioxia adjusting their expectations for the quarter to be down that 16 exabytes or ten percent of the quarterly market consumption for flash memory, research are pointing out the obvious price hikes to come.

“Flash memory prices will rise for sure, further adding fuel to the recent component price hike trend stemming from supply shortages,” said Ace Research Institute analyst Hideki Yasuda.

However, it's not all bad news on the flash memory front, competitors Samsung, Hynix Inc, and Micron Technology Inc are poised to benefit from WD and Kioxia's misfortunes as many manufacturers will be looking to supplement their production in the near future.

Shares for both SK Hynix and Micron rose roughly two percent in after-hours trading following WD and Kioxia's announcement.

While it's becoming easier for customers to swap out SSDs on Surface devices, many come pre-installed with Toshiba/Kioxia produced flash memory and this week's news will surely affect the rosy quarterly outlook for its hardware division Microsoft mentioned to investors a couple of weeks ago.

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