Samsung Power Outage May Raise Flash Prices

A dip in production at the world's largest Flash memory supplier could echo far and wide.

The theory goes that a butterfly flapping its wings in China can cause a tornado in Arkansas – and apparently the results of a minor power outage are just as far-reaching. When a spark in a transformer caused a blackout at six of Samsung’s flash memory plants in South Korea on Friday, it may have also raised flash memory prices the world over, due to the sudden drop in supply.

According to the Wall Street Journal, Samsung is the world’s largest NAND flash memory producer in the world, magnifying the significance of the temporary setback at their factories.  Besides the 21-hour shut down, the factories must now spend days recovering by clearing out chips that were ruined in the blackout and possibly restarting production lines.

The company originally estimated its losses at $50 million, then shrank that figure to $43 million, and reassured investors by announcing on Sunday that its insurance would cover all of it. Although the damage was less than expected, the interruption might still have been enough to pare back  the flash memory supply worldwide and raise prices, according to market analyst iSuppli. The market reacted immediately on Friday, with shares of competitors SanDisk and Micron jumping 4 percent and 1.78 percent respectively before the market closed.