Samsung to Cut Production of Memory Chips Due to Loss

Samsung Device Solutions, the part of the company responsible for memory chip production, posted a loss in the first quarter of the year. It is the first since 2009 that the company went into failure.

Due to this, the coming months could be better as Samsung is looking to cut production of memory chips further to cater for the loss.

According to an analysis by Kim Dong-won from KB Securities, the failure in quarter 1 was KRW 4.6 trillion, and it is predicted that in Q3 of this year, the loss will be around KRW 4.0 trillion, which is approximately $2.95 billion.

However, other analysts predict this loss to be less than this. Kwang-jin from Hanwha Investment & Securities, the forecasted loss will be around KRW 3.7 billion.

On the other side, Samsung also reduced the production of DRAM chips by 20% and NAND flash Chips by 30%. In the second half of 2023, this ratio will grow to 30% for DRAM and 40% for NAND.

Samsung and two of its biggest competitors also reduced chip production last year.

According to analysts, there is an oversupply of these products, and it will take some time to even the supply and demand.