(Yicai Global) Dec. 30 -- Global semiconductor titans Micron Technology and Samsung Electronics have announced operational changes at their plants in Xi’an following a recent outbreak of Covid-19 in the Chinese city.

The capital of Sha’anxi province reported 1,117 local coronavirus cases between Dec. 9 and yesterday and imposed a citywide lockdown, with non-essential services and businesses shut from midnight on Dec. 22.

Apart from being home to China’s world-famous terracotta army, Xi’an is also the location of many producers of integrated circuits and other tech firms.

The city’s IC sector was worth CNY76 billion (USD11.9 billion) last year, the largest in China, according to data from the Sha’anxi Semiconductor Industry Association. Xi’an’s chip design work was worth CNY14 billion, ranking sixth nationally, while chip packaging and testing was about CNY12 billion, taking fourth place.

US-based Micron is a major global memory chip supplier, ranking after South Korean behemoths Samsung and SK Hynix Semiconductor. Its main products are DRAM and NAND memory chips.

The city’s lockdown has thinned the labor force at Micron’s Xi’an plants and impacted DRAM chip assembly and testing, such as delayed delivery, the company said in a statement yesterday.

Samsung will adjust operations at its Xi’an plants to protect employees and partners and take all necessary measures such as using its global manufacturing network to ensure clients are not affected, the company said the same day.

Samsung’s two memory chip plants in Xi’an, its only overseas manufacturing facilities for NAND chips, declared a state of emergency last week. The plants provide the firm with over 40 percent of its NAND chips, about 15 percent of its global supply.

Meanwhile, Nvidia’s shares [NASDAQ: NVDA] fell after the leading maker of graphics processing units filed a 10-K document with the US Securities and Exchange Commission yesterday. Samsung is Nvidia’s chip foundry, so investors are concerned that the state of emergency at Samsung’s Xi’an plants may affect deliveries, the document said.

“The outbreak in Xi’an will affect companies’ production, but the impact is probably exaggerated by the market,” Sheng Linghai, an analyst with the research institution Gartner, told Yicai Global. “The decline in Nvidia’s stock price is possibly because the capital market has overjudged its future growth.”

Editor: Peter Thomas