Surging memory chip prices spark supply crunch in China

Transcript

00:00In China, a rally in memory chip prices that's been ongoing since September has ignited a

00:12scramble among downstream players to stockpile inventory, which is pushing chip makers to

00:18supercharge production. The production manager of a chip module manufacturer in South China's

00:24Guangdong province says they've doubled production capacity but are still falling short of demand.

00:30We've added more than 10 new machines, doubling our daily output from 100,000 to 200,000 units.

00:37But even with round-the-clock operations across three shifts, we're still falling behind demand.

00:43The surge in downstream demand has also tightened the supply of wafers, the raw material used to

00:50make chips. Instead of hunting for buyers, the company's general manager now spends his days

00:56negotiating with upstream wafer suppliers. We're also facing a shortage of raw materials,

01:03so we've had to turn down many orders. Memory chips are vital components that provide

01:09temporary and permanent data storage for modern electronics.