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Fears of a DRAM shortage are overblown

The explosion at Hynix’s factory in Wuxi, China was more smoke than fire according to the company.

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The fears of a DRAM shortage resulting from a fire at memory chip producer SK Hynix have been greatly exaggerated, according to company representatives.

Representatives say that there was no major damage to fabrication equipment, and production should resume by the end of the week. The cause of the fire is still being investigated. Company representatives also say that pictures of the fire with dark, billowing smoke made the situation seem much worse than it actually was.

Hynix’s plant in Wuxi produces nearly half of all the world’s DRAM. In the aftermath of the blaze, shares of rivals Micron and SanDisk rallied as fears of a memory shortage spooked investors.

Should the fire at Hynix’s plant have been much worse — damaging fabrication facilities — the price of DRAM would have skyrocketed sending up the cost of PCs, notebooks, and most other consumer electronics that have storage.

Source: Reuters

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