Huawei Technologies, Semiconductor Manufacturing International (SMIC), Yangtze Memory Technologies (YMTC), among others, have resumed their production work despite the spread of coronavirus.
Huawei Technologies said on Monday it resumed production of goods including consumer devices and carrier equipment, and operations are running normally.

The company has restarted manufacturing in line with a special exemption that allows certain critical industries to remain in operation, despite Beijing’s call to halt all work in some cities and provinces.

The spokesman said most of the production was in Dongguan, a city in the southern Guangdong province.

Other companies have also kept production running, in some cases even through Chinese New Year, in a sign of the critical importance Beijing places on its domestic tech supply chain, a subject of friction with the United States.

Yangtze Memory Technologies (YMTC), a state-backed maker of flash memory chips based in Wuhan – the city where the virus outbreak originated – confirmed on Monday that it has not yet ceased production.

“At present, production and operations at YMTC are proceeding normally and in an orderly manner,” a company spokesman wrote in a statement on Monday.

The spokesman added that no factory employees have been confirmed as infection cases, and that the company has enacted certain isolation measures and partitions to ensure the safety of employees.

State media reported that the chip maker did not cease operations over the Lunar New Year holiday.

Semiconductor Manufacturing International (SMIC) kept production running throughout the holiday break.

“SMIC needs to ensure that factory production runs 365 days a year and 24 hours a day to meet customers’ fabrication needs,” a social media post from SMIC read.

The chip fab, which rivals Taiwan Semiconductor Manufacturing, has facilities in Tianjin, Shenzhen, Beijing, and Shanghai.

DRAM or NAND flash fab companies

DRAM or NAND flash fab companies have not closed or partially suspended operations in China at the present on account of the coronavirus outbreak, the DRAMeXchange research division of TrendForce said.

The production in the memory industry will remain unaffected for DRAM and NAND flash in the short run. Since their contract prices for the first quarter have already been set, TrendForce maintains its previous forecast of a slight quarter-on-quarter increase in DRAM and NAND flash contract prices in Q1.

CXMT, one of China’s DRAM manufacturers located in Hefei, near the city of Wuhan, is currently operating the fab. CXMT’s expansion plan is on schedule, unaffected by the outbreak. CXMT is also one of the major semiconductor companies in China. The company holds a national special license and is not affected by the ban on domestic transportation of goods.

JHICC, another Chinese DRAM manufacturer, is in a similar situation as CXMT. Its fab remains operational as usual.

SK Hynix, one of the leading DRAM suppliers, has a production base at Wuxi in China. As it is away from Wuhan, it has not been impacted by the outbreak. SK Hynix’s production line remains operational since the shifts of most fab employees during the Chinese New Year have already been scheduled.

There is no substantial impact on DRAM production, but it is imperative to monitor whether the potential spreading of the virus can affect China’s logistics and transportation system, subsequently causing a nationwide material shortage.

Both YMTC and XMC, two leading NAND flash suppliers, announced that non-frontline personnel can work from home, but fab personnel must report to work as usual according to the Chinese New Year schedule.

There are concerns regarding resumption of work after February 9 due to quarantine measures in spite of efforts by YMTC and XMC to arrange sufficient manpower on the production line to maintain fab operations.

The capacity of YMTC’s Wuhan fab accounts for only around 1 percent of wafer input of the entire NAND flash industry, so there is limited direct impact on market supply.

Samsung and Intel have NAND flash production bases in Xi’an and Dalian, respectively, which are outside of Wuhan. Samsung has expansion plans at its Xi’an production base. Intel has no plan to expand its Dalian.