Chinese labour shortages and semiconductor factory fires could force up PC prices

Short-term labour shortages in China and a factory fire in a major semiconductor plant are threatening to cause a spike in PC prices ahead of Christmas, according to reports.

The Chosun reported a fire tore through a SK Hynix semiconductor factory in Wuxi, Jiangsu Province on September 4.

South Korean-owned SK Hynix is the world’s second largest producer of memory chips after Samsung, supplying Apple, Dell and Sony, with its 4GB DDR3 chip production affected by the blaze.

The fire occurred in one of two production lines at the facility during the installation of new equipment, and while one line remained unaffected with production restored on September 8, with Bloomberg reporting full production will not be restored until November.

DigiTimes is reporting the fire has pushed up October contract prices for mainstream 4GB DDR3 modules towards the $US35 mark, with SK Hynix also increasing production of NAND RAM chips at its South Korean facilities.

Low inventory levels at PC manufacturers means the increased prices are likely to be passed on to consumers.

Notebook computer shipments have also been impacted by a short-term labour shortage caused by workers not returning to work after going back to their hometowns for China’s week-long National Day holidays, which ran from October 1 to 7.

Making matters worse, many contract manufacturing firms were only able to fill around 85% of their orders for September, with delayed orders carried over to October.