New Delhi: Samsung Electronics mentioned on Friday that it was lowering reminiscence chip manufacturing after it flagged a 95.8 % plunge within the first quarter’s working revenue from the identical interval final yr, as a downturn in semiconductor demand hurts it and different producers of the elements, in line with Nikkei Asia.
“The company is cutting memory production volumes to a meaningful level,” the South Korean firm mentioned in a press release shortly after releasing earnings steering, including, “Demand for memory has declined due to the macroeconomic situation and low consumer sentiment,” Samsung mentioned working revenue possible got here all the way down to 600 billion received (USD 455 million) for the three months by the top of March, in contrast with 14.1 trillion received final yr. (Also Read: Bill Gates, Ex-Wife Share First Pic With Granddaughter – Check Pics)
It sees income having fallen 19 % to 63 trillion received throughout the identical interval. The firm will launch full earnings knowledge, together with for web revenue, later this month, Nikkei Asia reported. (Also Read: Scientists Claim AI To Overtake Humans Soon)
Nikkei Asia mentioned the steering is decrease than a FnGuide consensus which predicted Samsung’s quarterly working revenue at 1 trillion received and income at 64.2 trillion received. The analysis agency collected knowledge from 22 brokerage homes.
Investors welcomed Samsung’s resolution to chop reminiscence chip manufacturing, sending the corporate’s shares 4.3 % larger to shut at 65,000 received, Nikkei Asia reported.
Though Samsung acknowledged a worsening in its reminiscence enterprise, it didn’t unveil numbers by sector, Nikkei Asia reported. Analysts, nonetheless, estimate that its semiconductor enterprise could have posted an working lack of greater than 4 trillion received within the quarter.
Samsung is the world’s greatest reminiscence chipmaker, accounting for about 40 % of dynamic random-access reminiscence (DRAM) and one-third of NAND flash reminiscence markets.
NAND reminiscence is a type of electronically erasable programmable read-only reminiscence (EEPROM). Nikkei Asia reported that the steering got here as demand for reminiscence chips, historically topic to growth and bust cycles, has fallen sharply, inflicting oversupply out there.
Hong Kong-based trade evaluation agency Counterpoint Research says that Samsung’s resolution to chop manufacturing could assist decelerate the decline of reminiscence chip costs to some extent, however would not see it resulting in a rebound in chip demand.
“Counterpoint expects that the utilisation rate reduction [will] slow down the decline of commodity memory prices,” Brady Wang, a senior analyst, informed Nikkei Asia in an e-mail.”
Still, this oversupply is because of weakening demand and excessive stock, so Samsung’s manufacturing minimize shouldn’t be anticipated to stimulate gross sales,” Wang said, adding, “Therefore, Counterpoint believes that the oversupply scenario will proceed till the third quarter when the market begins to deplete stock for the fourth quarter seasonal demand.”
