Bloomberg News

Sony’s Costs for Making Vaio Computers Rise After SK Hynix Fire

October 08, 2013

Sony Corp. (6758) said the costs of manufacturing its Vaio computers rose after a fire last month curbed the production of memory chips at an SK Hynix Inc. factory in China.

“Production costs are affected because the price went up,” Ryosuke Akahane, a senior vice president overseeing the company’s Vaio and mobile unit, said in an interview in Tokyo today.

The Tokyo-based electronics maker has enough chips for its desktop and laptop computers after boosting its supply from other manufacturers, Akahane said.

Computer and smartphone makers are paying more for a key component of their devices as the price of the benchmark DDR3 2-gigabit dynamic random-access memory chip reached $2.33 today, compared with $1.60 on Sept. 4, the date of the fire, according to DRAMeXchange, Asia’s largest market for the components. SK Hynix (000660), the world’s second-largest producer of memory chips with customers including Apple Inc. (AAPL:US) and Dell Inc. (DELL:US), said it boosted production in South Korea to reduce the impact of the blaze.

Park Hyun, a spokesman for Icheon, South Korea-based SK Hynix, declined to comment today.

The fire, which occurred during the installation of equipment at a factory in Wuxi, burned for about 90 minutes before being extinguished. One person suffered minor injuries.

SK Hynix makes half of its chips in Wuxi. The company held about 30 percent of the global DRAM market in the second quarter, following Samsung Electronics Co.’s 32.7 percent, TrendForce said in an Aug. 8 report.

Before the fire, Sony cut its fiscal year sales forecast for personal computers to 6.2 million units from 7.5 million. Akahane maintained that forecast, though he said sales are not doing well in emerging markets including India and Russia.

“It will be hard to turn the Vaio PC business profitable within the fiscal year,” Akahane said today.

To contact the reporter on this story: Grace Huang in Tokyo at xhuang66@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net


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