Samsung to cut chip production to stem losses
By ForGeeks Samsung Device Solutions (DS), the division responsible for the chip business, posted a loss in the first quarter of this year, its first loss since 2009. Unfortunately, the rest of this year doesn’t bode well either, so Samsung is cutting back on production plans.
Operating loss in the first quarter was Q4.6 trillion and was narrowed to Q4.36 trillion in the second quarter. Analyst Kim Dong-won of KB Securities forecasts a third-quarter loss of about KRW4.0 trillion ($2.95 billion).
Analyst Kim Dong-won of KB Securities forecasts a third-quarter loss of about KRW4.0 trillion.
In the first half of the year, the company cut production of DRAM chips by 20% and NAND flash memory chips — by 30%. In the second half of the year, the cuts will rise to 30% and 40%, respectively, according to Kim Dong-won.
The cuts will increase to 30% and 40%, respectively, according to Kim Dong-won.
The problem is low demand for chips — Samsung’s rivals, SK hynix and Micron Technology, have already cut production in the past year. There is still an oversupply of chips, and it will take some time for supply and demand to equalize.
The problem is that there is an oversupply of chips.
