Samsung warns of decrease earnings amid falling demand for reminiscence chips

Samsung has warned of plummeting earnings and plans to chop again on reminiscence chip manufacturing in response to falling demand, The Korea Herald has reported. It expects to earn simply 600 billion received ($455 million) for the primary quarter of 2023, a drop of 96 % from the identical interval final 12 months. It blamed falling demand for reminiscence chips, a scenario that might be a nasty signal for the tech trade as an entire. 

“We’re adjusting to decrease reminiscence manufacturing to a significant degree… along with optimizing line operations which can be already underway,” Samsung mentioned in an announcement. It added that it might proceed to put money into clear room infrastructure and develop R&D spending, because it sees improved reminiscence chip demand within the mid- to long-term. 

Though it trails Taiwan’s TSMC in different areas, Samsung is the worldwide chief in DRAM and NAND flash reminiscence chip manufacturing with 40.7 and 31.4 % shares respectively. Such chips are utilized in shopper units of every kind, starting from smartwatches to cell phones and laptops. The oversupply of reminiscence chips is due to this fact an indication that demand for such merchandise has fallen considerably as a result of an ongoing world financial slowdown. 

The slowdown comes simply a short while after one of many largest tech trade booms of all time, powered by the COVID-19 pandemic. Since late in 2021, nevertheless, reminiscence costs have dropped by way of the ground, with DRAM and NAND costs down by 20 and 15 % in simply the final quarter alone. One brilliant spot for Samsung has been gross sales of its new Galaxy S23 smartphone, which helped bolster earnings, the corporate mentioned. It is going to reveal extra particulars in its earnings report set to drop on the finish of April.