News Karnataka
Wednesday, December 06 2023

Samsung Q1 profit down 96%, cuts memory chip output,

Samsung Q1 profit down 96%, cuts memory chip output,
Photo Credit : IANS

Seoul: Samsung Electronics on Friday said it has cut memory production in the short term, as its quarterly profit plunged significantly (likely 96 per cent) amid the chip downturn, in a sharp departure from its previous position that it would not artificially reduce output.

The world’s largest memory chip and smartphone maker earlier in the day estimated its January-March operating profit at 600 billion won ($454.9 million), sharply down from 14.12 trillion won a year ago.

Samsung blamed sluggish demand for tech devices, coupled with customers’ inventory adjustment, for the poor performance, reports Yonhap news agency.

“We are adjusting memory output to a meaningful level for products that we have secured enough inventory to deal with future demand,” the company said in a regulatory filing, in an apparent effort to deal with falling prices and a supply glut.

It did not elaborate on what a meaningful level means.

“While we have adjusted our short-term production plan, we will continue to invest in infrastructure to secure clean rooms and expand R&D expenditures to strengthen our technology leadership as we forecast solid demand in the medium and long term,” it said.

Samsung’s first-quarter sales likely fell 19 per cent to 63 trillion won from 77.78 trillion won from a year earlier. The data for net profit was not available.

The operating profit was 16.7 per cent lower than the average estimate.

The tech giant did not provide the results of each business division and will release its final earnings report later.

Samsung’s Device Solution (DS) division, which oversees its chip business, is forecast to run a deficit of around 4 trillion won, in its first financial loss in 14 years, according to analysts’ estimates, as a surplus chip inventory has been growing significantly amid tapering global demand.

The last time Samsung saw its backbone unit trade at a deficit was the first quarter of 2009, when the world was emerging from the 2008 financial crisis.

The world’s largest memory chip maker forecast the global chip market will shrink 6 per cent on-year to $563 billion this year, due to a sharp drop in demand, and warned of difficult conditions continuing throughout the year.

Read more:

Qualcomm Snapdragon 7+ chipset has AI-enhanced features

Apple’s new 13, 15-inch MacBook Air may feature M3 chip

Top 10 semiconductor buyers lower chip spending by 7.6% in 2022

MediaTek announces Genio 700 chipset for industrial, smart home products

After Samsung, TSMC starts mass production of 3nm chips

Share this:
Support NewsKarnataka's quality independent journalism with a small contribution.

How useful was this post?

Click on a star to rate it!

Average rating 0 / 5. Vote count: 0

No votes so far! Be the first to rate this post.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
Editor's Pick

Find the best odds at 10Cric and IPL Betting 2023! Signup today and get up to a 100% deposit bonus.

To get the latest news on WhatsApp