Micron's stock fell 0.6 % in premarket trading on Thursday after the chipmaker warned a day earlier that severe COVID-19 limitations in Xi'an, China, could disrupt its chip production plant there.
Micron stated that while the majority of its client demand is being met, there may be some short-term delays. It did warn, however, that additional or more restrictive COVID-19 limits may be more difficult to overcome.
Authorities in Xi'an, about 600 miles southwest of Beijing, imposed a stringent lockdown last week, prohibiting citizens from leaving their homes, as COVID cases in China reached levels not seen before 2020.
The city's closure has cut Micron's team member and contractor workforce at its Xi'an location, affecting production levels of its DRAM assembly and test activities there, according to Micron.
The company stated that it is collaborating with suppliers in the region who are facing similar issues.
DRAM chips, which are used in both personal computers and servers, accounted for 72 % of the company's sales in fiscal year 21.
Another manufacturer, Samsung Electronics, issued a similar warning on Wednesday. Its stock dropped 0.6 % today in Seoul.
The warnings could not have come at a worse moment for the supply chain as a whole. Consumers will have to wait longer for their mobile phones and laptops, which are only slightly more expensive than they were a year ago due to a chip shortage spurred by pandemic-driven demand for devices and the general turn of the automobile sector to smarter cars. Simultaneously, persistent demand has propelled Micron to near-all-time highs.