Samsung Electronics announced it would cut chip production “by a significant level” on the same day it reported it expected operating profit to drop 95.8% in the January-March period to about 600,000 million won ($455 million).
In a statement to the operator stock exchange in Seoulthe company said it would adjust production to reduce excess inventory in light of the contraction in the semiconductor market.
However, Samsung, which initially assured that it would not adjust its production due to falling prices in the sector, He did not provide further details on the levels at which he will reduce the yield of his plants.
“As long as we adjusted the production plan in the short term We will continue to invest in infrastructure to establish cleanrooms (a space where semiconductors are manufactured) and expand R&D investments to strengthen our technology leadership as we expect solid demand in the medium to long term,” he explained in a statement.
On the other hand, the Suwon (south of Seoul)-based company’s Q1 2023 earnings forecast offered today was flat below most analysts’ estimates.
This is also predicted by Samsung your calculation for January-March is reduced by 19% up to 63 trillion won ($47.743 million).
The a big drop from the global chip marketSamsung’s flagship, which has suffered through the summer behind this poor performance.
Many analysts predict that, after the spectacular growth during the first years of the pandemic, a correction in demand will do valuation of the global semiconductor market this year it is at the level it was in 2021.
As usual, Samsung Electronics it did not release its net profit estimate or break down its earnings forecast by business branches.
In any case, many analysts expect its Device Solutions unit, which is in charge of chips will record a January-March operating loss of around 4 trillion won ($3.04 billion)which will mean his first negative balance in 14 years.
The last time this branch of the company recorded red numbers in the year first quarter of 2009in the middle of the financial crisis.
Company, the world’s largest manufacturer of memory chipslater this month it will publish its full balance sheet for the first quarter of 2023.
The announcement that the company will reduce production to adjust inventories cheered investors on the Seoul Stock Exchange, and at the close of today’s session, Samsung Electronics shares showed a significant progress of 4.33%.
Source: Panama America
I am Jason Root, author with 24 Instant News. I specialize in the Economy section, and have been writing for this sector for the past three years. My work focuses on the latest economic developments around the world and how these developments impact businesses and people’s lives. I also write about current trends in economics, business strategies and investments.
