INdustrycTceh INsight Logo

Samsung Electronics plans to evolve a ‘meaningful’ amount of chips to produce to support costs

April 10, 2023: On Friday, Samsung Electronics said it would make a “meaningful” cut to chip production, after the lead of tiny rivals, as it grapples with a sharp international downturn in semiconductor demand that has increased costs.

The unusual output cut by the biggest memory chipmaker in the world with no last announcement recalled by Samsung officials and analysts came following it flagged a worse-than-anticipated 96% plunge in first-quarter profit.

Investors brushed off the profit miss, which bets the move by the industry leader would help chip costs that had decreased by 70% more than the previous nine months.

Samsung impressed 4.5% in early trading in the most significant one-day rise since September, while rival SK Hynix’s shares surged 5.6%.

Smartphone and personal computer engineers had stocked up on chips during the pandemic when demand for consumer gadgets surged. Still, they run down inventories as shoppers slash back on purchases between the increasing inflation.

Samsung said memory demand had decreased sharply because of a weak global economy and customers reducing purchases as they used up their stocks.

“We are decreasing the production of memory chips by a meaningful level,  that of products with supply secured,” it added around those with sufficient inventories.

Samsung did not say the size of the planned production slash, but it sent a definite signal for a firm that had previously said it would make minor adjustments, such as stops for refurbishing production statement but not a full-blown slash.

“The statement that the No. 1 market share company is joining production cuts lifted. SK Hynix and Micron have shown production cuts, but Samsung has not, so the market was witnessing it,” said John Park, an analyst at Daishin Securities.

“Today’s production slashes signal a positive outlook for a memory chip rebound in the year’s second half.”

Although slashing short-term production, Samsung said it was still making long-term investments and infrastructure research to secure needed clean rooms for chip displays and expand its technological lead.

 

About Us

We provide the insights on leaders who are responsible for taking their organization to new heights, all the while bringing together a group of talented individuals.

Recent Posts

The Lake Companies | Making Manufacturing Easier…Forever! | Greg Lake

Today, most manufacturing companies face similar challenges. Those tend to intertwine themselves with implementing and adhering to best business practices. There are many reasons for this, including:
No standard definition for best practices.
The unending confusion of new shiny objects created by the technology industry.
The fact that manufacturing is such a complex industry.

Cyncly | Preparing Customers for the Future | Andrea Gnoato

Cyncly was created in September of 2022 as the new brand to unite Compusoft, 2020, and their affiliate companies after the two companies merged in 2021. One of the key factors driving the decision to form Cyncly as a global brand was that consumers worldwide wanted a seamless experience when they decided to improve their homes.

Tecnomatix | Making Transformative Products | Tony Hemmelgarn

Tecnomatix® is a comprehensive portfolio of digital manufacturing solutions that helps companies to digitalize manufacturing and the process of turning innovative ideas and raw materials into transformative products. It is a software suite that enables organizations to create a digital twin of their manufacturing processes, including robots, automation, material handling systems, and people, to improve the performance of their business.

Samsung Electronics plans to evolve a ‘meaningful’ amount of chips to produce to support costs