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Samsung Recovers after Power Outage at Memory Chip Plant

Despite a power outage at its semiconductor plant in Giheung, South Korea on Aug 3., Samsung plans to produce its target number of memory chips this month. Friday's power outage was caused by a switchboard malfunction and disrupted six chip production lin

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August 9, 2007 – Despite a power outage at its semiconductor plant in Giheung, South Korea on Aug 3., Samsung plans to produce its target number of memory chips this month. Friday's power outage was caused by a switchboard malfunction and disrupted six chip production lines. The stalled production set the company back 40 billion won (approx. $43 million USD), according to a Reuters report.

Five of the production lines that were affected were DRAM (dynamic random access memory), or computer chips used in PCs, according to a Wall Street Journal report. The other - NAND memory - includes chips used in digital cameras, portable music players, and other consumer electronics.

As the world’s No. 1 maker of chips, Samsung’s cash cow has traditionally been its semiconductor division. Last month, however, Samsung reported semiconductors dipped 4 percent in sales, making up 29 percent of total sales, according to its second quarter earnings release. Samsung reported that both DRAM and NAND memory are in strong demand.

Analysts have speculated that the temporary halt in Samsung’s chip production could work to the advantage of other semiconductor makers. Others predict that Samsung may move away from DRAM and instead focus on NAND flash memory, according to Reuters.

The Giheung plant resumed full operation the following day, Samsung stated in a company press release.

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