By Dhirendra Tripathi

Investing.com – Micron stock (NASDAQ:) traded 0.6% lower in Thursday’s premarket after the chipmaker warned a day earlier that strict Covid-19 curbs in the Chinese city of Xi’an could disrupt its chip manufacturing unit in the area.

Micron acknowledged that it meets most customer demands, but there could be short-term delays. It warned, however that Covid-19 restrictions may become more restrictive and difficult to manage.

Authorities in Xi’an, which is around 600 miles southwest of Beijing, ordered a strict lockdown last week with residents barred from leaving home as Covid cases in the country touched levels last seen in 2020.

Micron said the city’s closure has reduced Micron’s team member and contractor workforce at its Xi’an site, resulting in some impact to output levels of its DRAM assembly and test operations there.

According to the company, it works with other suppliers who face similar problems in the area.

Dynamic random access memory chips or DRAM, which go into both personal computers and servers, accounted for 72% of the company’s FY21 revenue.

Samsung Electronics (KS) issued a similar alert Wednesday. Today, its shares ended 0.6% below their Seoul counterparts.

For the wider supply chain, these warnings could not have been issued at a more critical time. Due to the increased demand from gadgets due to pandemics, and also the shift in the auto industry’s focus towards more intelligent cars, there has been a longer waiting time for customers who need their smartphones and laptops. They are also now much more expensive than they were last year. Micron’s steady demand is helping to drive.