Samsung‘s operating profit plummeted by 96, announcing a reduction in storage chip production!
Time:2023-04-11
Views:1065
Source: Tiantian IC
According to foreign media reports, Samsung reported its lowest profit since 2009 and stated on Friday that it is cutting production of storage chips.
Due to the weak demand for products such as servers, smartphones, and laptops, NAND flash memory is still in oversupply, "TrendForce said in a report last week. The key to returning supply and demand to market balance lies in whether NAND suppliers can further reduce production
Q1 operating profit plummeted by 96%
Samsung stated that its operating profit for the three months to the end of March may reach 600 billion won ($455 million), compared to 14.1 trillion won last year. The company expects its revenue to decrease by 19% to 63 trillion won during the same period.
This prediction is lower than the data from FnGuide, which collected data from 22 securities brokers and predicted Samsung‘s quarterly operating profit of 1 trillion won and revenue of 64.2 trillion won.
Although Samsung acknowledges that its memory business is deteriorating, it has not released numbers by department. Analysts estimate that its semiconductor business may experience an operating loss of over 4 trillion won this quarter. Samsung is the world‘s largest memory chip manufacturer, accounting for approximately 40% of the DRAM and one-third of the NAND flash memory market.
Announcing production reduction of storage chips
Samsung stated that the company is reducing its production of storage chips. Samsung stated in a statement that "based on an assessment that the company has ensured sufficient quantities to cope with future changes in memory demand, Samsung is adjusting to reduce memory production to a meaningful level and optimize production line operations that are already in progress.
This is an important step taken by the industry after oversupply led to a sharp drop in prices, and investors supported the decision, with the company‘s stock price rising nearly 4% in early trading. Samsung‘s production reduction is a meaningful measure, "said Lee Seung Woo, an analyst at Eugene Investment&Securities. Samsung‘s production reduction may soon affect the spot price of memory. There is almost no demand now
Samsung has been refusing to reduce production in the past few months, partly to gain market share from competitors.
Samsung also stated that it will continue to invest in infrastructure construction and expand research and development expenses to consolidate its market leadership position. We have reduced our short-term production plans, but due to our expectation of strong demand in the medium to long term, we will continue to invest in infrastructure to ensure necessary clean rooms and expand research and development investment to consolidate our technological leadership position
In addition, storage manufacturer Meguiar stated that customer inventory is decreasing and expects the supply-demand balance to gradually improve. Media reports suggest that the pace of recovery will depend on peer efforts to reduce supply.
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