Samsung Electronics plans to cut memory production, expecting a 96% year-over-year drop in operating profit in the first quarter of 2023. This will be the South Korean tech giant’s lowest profit since the first quarter of 2009. Samsung’s profits were affected by the global macroeconomic downturn, oversupply in the memory market and weak demand.

The company is optimizing operations to ensure a sufficient volume of memory chips for future demand. At the same time, investments in infrastructure, research and development will continue to strengthen technological leadership in the industry. Previously, Samsung expected a quarterly profit of $450 million for the period from January to March.

Earlier, Samsung said it would not cut investment in memory chips despite the decline in demand, hoping for a recovery in the memory chip market in the second quarter of 2023. The company’s rivals, such as Micron, Kioxia and SK Hynix, have also cut memory production to cope with oversupply.

In the third quarter of 2022, Samsung held the largest share of the global DRAM and NAND market – 40.7% and 31.4%, respectively. Prices for these types of memory fell by about 20% and 15% in the first quarter of this year.

Course

Frontend Developer

Last month, Samsung said it would spend about $230 billion to build five new memory and lithography factories in South Korea over the next two decades. The move is in line with the government’s ambitious goal of creating a semiconductor mega-hub on the outskirts of Seoul.

The company will provide a full financial report at the end of April, including net profit and profit by sector.

RAM became cheaper by 20% in the first quarter of 2023 and will lose another 10-15% of its price in the second – TrendForce

Source: TechCrunch