Samsung’s semiconductor division is cutting production of its chips due to falling demand.


Samsung's new V-NAND memory

When it comes to DRAM memory chips and NAND flash memory, Samsung Semiconductor is the largest company in these specific technology markets. However, its latest financial report revealed some deep problems with its chip sales and that could potentially mean problems for the entire industry.

CNBC Reports suggest that Samsung has released its preliminary financial guidance for the first quarter of 2023. Among those numbers, it revealed that its profit fell to 600 billion won ($455.5 million), from 14.12 trillion won in profit a year earlier. Samsung has announced its lowest profit in 14 years.

That lower number was due to its poor performance in its semiconductor division. Analysts expect Samsung’s chip business to lose 2.1 trillion won ($1.6 billion) when it reports its final Q1 2023 numbers. Samsung will reveal its final Q1 2023 numbers in late April.

Samsung said today that overall weak economic conditions have led to a decline in memory chip demand. Companies that buy Samsung’s chips have cut orders as they try to use up their existing inventory.

As a result, Samsung said, “We are reducing the production of memory chips to a meaningful level, especially for products that have a secure supply.” There’s no word on how much Samsung will cut its chip production. However, the decision is likely to increase overall memory chip prices in the coming months.

Source: Samsung through CNBC


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