Ransomware attack on Toshiba forces it to halt production of NAND Flash

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Ransomware attacks forced Toshiba to cease NAND flash memory production, costing the business the equivalent of 400,000TB in SSD storage. In fact, Toshiba downed tools for up to six weeks following the attack, reports DigiTimes. Subsequently, the production loss could trigger a NAND supply crisis.

But production has now returned to normal, said the sources. Toshiba is one of the world’s biggest NAND producers. As such, a six-week shutdown means 100,000 unproduced wafers. In terms of storage, those 100,000 lost wafers equal around 50,000,000 chips, or 400,000TB, according to PCGamesN.

The world’s NAND flash market was supposed to see improvements to the undersupply situation starting the fourth quarter, but the Toshiba fab shutdown has now created uncertainties, the sources indicated.

Demand for NAND flash chips has been driven by an increase in the average memory content in smartphones and server market growth, while growth in the supply has been constrained by chipmakers’ slower-than-expected transition to 3D technology. The global supply of NAND flash memory fell short of demand in the latter half of 2016 and has remained tight since.

Nevertheless, end-market demand is actually not as strong as expected, and the NAND flash price rally has gone out of proportion, unable to reflect the real market demand, the sources said. Channel distributors have become reluctant to place orders as the consumption of end-market devices, such as SSDs, is being discouraged by their high prices. The price hikes already started to show an adverse impact on demand at the end of the second quarter, the sources noted.

Toshiba’s bad luck is also likely to affect its partner, SanDisk. NAND memory supply is already tight, so the mishap seems set to drive prices up in the short-term, at least. However, the company is investing nearly $1 billion in production equipment at its Yokkaichi Fab 6 plant, which should help counter supply issues long-term.

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