The Samsung Electronics semiconductor plant in Giheung, Gyeonggi Province was back to normal a day after the accident on Saturday. Damage was less than expected. Samsung Electronics first estimated it would lose W50 billion (US$1=W923), but lowered the estimate to under W40 billion on Sunday. Some Samsung Electronics staffers privately said since the outage pushed semiconductor prices up, it could on the contrary lead to better sales results.
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Samsung Electronics' Giheung plant with semiconductor production lines in Yongin, Gyeonggi Province was struck by a power outage on Friday afternoon. In the worst-case scenario, that would mean reduction in 15 percent of the memory chip production planned for the third and fourth quarters.
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¡ß Less damage then expected
At 2:30 p.m. on Friday, six production lines at the Giheung plant went down due to a power cut. They resumed normal operation at noon Saturday, 21 hours and 30 minutes later. The signs are that everything is back to normal. Vice chairman Yoon Jong-yong, who had arrived at the plant to deal with the emergency after it took place, left on vacation at noon on Saturday.
Yoon and Samsung semiconductor division head Hwang Chang-kyu arrived at the plant two hours after the accident on Friday and stayed until the production lines were back to normal. Right after the outage, stock analysts warned it would take at least a month to completely normalize the production lines and might cost a maximum W700 billion in damage, citing the example of an earthquake that shook Taiwan in 2000. They did admit there are differences: after an earthquake, for instance, there would have to be precision work to fix twisted production equipment.
But Samsung Electronics later said damage was an estimated W36 billion, based on the number of semiconductor wafers that would have to be thrown away as a result of the power outage, the number of chips that could have been produced with each damaged wafer, and the downtime.
¡ß Flash memory prices soar
The stoppage reverberated throughout the world¡¯s IT industry since Samsung accounts for more than 40 percent of the world's production of NAND Flash memory chips -- the storage device used for mobile phones. The international press concluded that Samsung rivals such as Hynix Semiconductor and Japan¡¯s Toshiba would benefit.
But Apple, whose iPod uses Samsung Flash memory chips, will suffer, experts predicted. The average price of Flash memory chips soared 7.4 percent in the daily high on the day of the accident. Also soaring were the stock prices of semiconductor makers: SanDisk increased 4 percent, and Hynix and Toshiba added 3 percent. Apple dropped 1.34 percent. Market researcher iSuppli said the disruption at facilities which make Flash for iPod music players and iPhones may extend a shortage of the chips through at least the first half of August, potentially boosting prices.
¡ßBlessing in disguise
Samsung Electronics wants to know what caused the accident but has yet to start a full-fledged investigation. The company said it will try to find who was responsible by investigating the cause of the accident after organizing a special investigation team consisting of all parties concerned, including the electrical equipment manufacturer, the Korea Electrical Safety Corporation, and power monopoly KEPCO. Samsung Electronics' production lines were said to be proof against an earthquake measuring 6 on the Richter scale.
Yet there are signs that Samsung Electronics could actually benefit if chip prices increase. Im Hon-bin, an executive with Mirae Asset Securities, said, "If the international prices of flash memory chips increases 10 percent, Samsung Electronics will earn US$700 million more in annual net profits."
(englishnews@chosun.com )
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