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Sources said Samsung Electronics is considering cutting chip production in the first quarter or a huge loss

via:新浪科技     time:2023/1/31 15:02:39     readed:256

Sina Technology, Beijing, January 30 evening news, according to reports, people familiar with the matter said, due to the first quarter of this year may be a huge operating loss, Samsung Electronics is considering cutting semiconductor production.

Samsung Electronics, the world's largest maker of memory chips, is considering cutting wafer inputs to produce fewer DRAM and NAND chips, the person familiar with the matter said.

The move means that Samsung Electronics will also change its stance on its consistent position of sticking to the chip production plan unchanged. Samsung Electronics executives said in October last year, the company will adhere to production plans, while advancing chip manufacturing technology to tide over the industry's supply glut and widen the technology gap with competitors.

But people familiar with the matter said that as the industry slowdown may exceed expectations, Samsung Electronics is now considering following the lead of its rivals and cutting capital spending and chip production to support falling prices and ease the oversupply situation.

Before that, SK Hynix (SK Hynix), Micron Technologies (Micron Technologies) and Armor Man (Kioxia ) and other chip makers have begun to reduce production.

Citigroup Global Markets (Citigroup Global Markets) said in a research report that the possibility of Samsung adjusting its chip supply by significantly cutting investment is increasing, because memory chip prices have fallen more than expected, potentially pushing down Samsung's profitability to below the "break-even point".

This pessimistic outlook expectation also highlights the sharp downturn in the global technology industry. Currently, the technology industry is struggling to cope with deteriorating consumer demand caused by high inflation, rising interest rates and a sluggish economy.

Earlier this month, Samsung Electronics reported its worst quarterly operating profit in eight years, as the global economic downturn dampened demand for semiconductors from electronics makers. In response, Samsung Electronics also cut its 2023 chip profit forecast by half.

Industry watchers said that in the first quarter of this year, Samsung Electronics' semiconductor business could post an operating loss of 1 trillion won (about $811 million), compared with an estimated loss of 500 billion won in the fourth quarter of last year. Analysts also expect that if such unfavorable market conditions continue, Samsung's second-quarter semiconductor losses could expand to 1.5 trillion won.

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