Samsung Slashes Chip Production After Profits Plunge – IOTW Report

Samsung Slashes Chip Production After Profits Plunge

ZeroHedge: Over the last year, the global semiconductor industry has been in a downward spiral, primarily due to decreased personal computer demand following the Covid surge. As a result, memory chip prices have plunged, with Samsung Electronics Co., the top manufacturer of memory chips, opting not to cut production to expand its market share. However, Samsung is now moving towards resolving the supply surplus with the announcement to slash memory chip production. Additionally, the company reported lower-than-anticipated first-quarter profits, the smallest since the great financial crisis. 

The South Korean chipmaker said Friday it would make a “meaningful” cut to chip output after operating profits cratered by more than 95% to 600 billion won ($450 million) for the first quarter, missing the average analyst estimate of 1.4 trillion won. Sales dropped by 19% to 63 trillion won. 

“We are lowering the production of memory chips by a meaningful level, especially that of products with supply secured,” Samsung said. 

Samsung’s shares closed up more than 4% in South Korea on the news, the highest in three months. Other memory chipmakers’ shares also surged, including a 6% rise in Hynix.  MORE

14 Comments on Samsung Slashes Chip Production After Profits Plunge

  1. Old RAM prices have cratered… If you still have an old DDR3 system in a homelab, or “Mom’s email computer”, this is probably your last chance to max it out, as they’ll shutdown those fabs and rebuild them for the new stuff. You can get 32Gb DDR3 (4 x 8Gb) for less than $50. DDR4 prices have eased a bit, but that’s still mainstream production. DDR5 is still crazy expensive and mostly constrained to servers.


  2. SNS,

    Samsung is South Korea. They’re currently building a huge fab in Taylor, Texas, and have had another in Austin for 20+ years. They’ve been taking high school kids with decent science & computer skills and little college prospects on day long field trips this year, that end with a internship pitch. Ala “Spend a year in South Korea training, and then sign up for a 4 year term and we’ll help pay for college”…


  3. @Kali in Texas
    One of my sons works at Samsung Austin Semiconductors and will transfer to the new fab in Taylor when finished. Another son worked at Samsung Austin Semiconductors for years and became so knowledgeable with the EUV tools that ASML hired him away from Samsung. He is now an EUV Field Service Engineer with ASML and will be on the startup team located at Taylor. My other son works for the German company Infinion Austin Semiconductor. None of them have college degrees but these companies are starving for people with strong work ethics, and they have that in spades. They are doing very, very well. They have all made themselves valuable to their companies. Two of my sons are Navy vets and are appreciated for it. Plus, they have no college debt for a worthless degree.

  4. Semiconductor biz is a bad joke. We were Lam Researches premiere chamber manufacture for a couple years. Until the market took a nose dive and we weren’t willing to give “the Gods of the valley” free shit.
    Here’s the problem with the Semi Conductor market. And it effects every aspect of it. If there’s a 20% chip shortage every manufacturer out there tries to fill that 20% by over producing. Now you have a glut of chips until they run out of them. It was explained to me by the Marketing Manager of LAM as a rubber band constantly being stretched to excess in both direction. Any thing PVD should be avoided. Tell your kids seek employment elsewhere. It’s a shit market.

  5. fullmetal256,

    Intel had a schedule miss on Sapphire Rapids. They’re actually quite nice, but still kind of power hungry vs. AMD. I’m not sure they nice enough to throw EPYC out of the cloud, but… The weird thing these days is the variation in models/platforms/target-markets… Suffice to say next year will be interesting.


  6. Brad: “Here’s the problem with the Semi Conductor market. And it effects every aspect of it. If there’s a 20% chip shortage every manufacturer out there tries to fill that 20% by over producing. Now you have a glut of chips until they run out of them.”

    Flip side of the coin… I’m not going to spend 3 or 4 years engineering a product with a single point of failure on chip availability. The “no unicorns” rule. If it’s not cross licensed and has multiple sources, I’m not buying it.


  7. Dr. Hambone,

    Warn your son’s about the school districts between those two locations. The insanity has landed.

    And I try to “Drive Friendly”, despite my childhood point of origin. 😉


  8. @Brad
    One of my sons was working in Houston at a specialty machine shop and programed the largest electron beam welding machine in the US. They specialized in producing huge parts for the deep-sea oil drilling industry and parts for the space and aerospace industry. The business was always in a state of flux. Contracts came and went sporadically, and it became too nerve wracking for him. At one point, he was cut to 32 hours a week for a year. He has steady work now with unbelievable pay and benefits. Machinists run in our family. My grandfather owned his own machine & welding shop and made a good living all his life. I wish you well in your endeavors, but times have changed, and semiconductors aren’t going away no matter what a marketing manager from a small player company tells you. Things might be looking grim for him and his company, but the big guys like Samsung and ASML can weather the storm. I know. I worked for ExxonMobil most of my life. Never missed a day of work in 32 years, because they had the resources to weather the ups and downs in the market while small players died on the vine. Good luck!

  9. @Kali in Texas
    They are well aware of the situation with the schools as they have been living in that area for quite some time. They have moved progressively farther away from Austin and into the more rural towns surrounding it to avoid the lunacy.


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