Seoul [South Korea], April 7 (ANI): Samsung Electronics stated on Friday that it was decreasing reminiscence chip manufacturing after it flagged a 95.8 per cent plunge in 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 stated in a press release shortly after releasing earnings steerage, including, “Demand for memory has declined due to the macroeconomic situation and low consumer sentiment.”Samsung stated working revenue seemingly got here all the way down to 600 billion gained (USD 455 million) for the three months by way of the tip of March, in contrast with 14.1 trillion gained final yr. It sees income having fallen 19 per cent to 63 trillion gained throughout the identical interval.
The firm will launch full earnings knowledge, together with for web revenue, later this month, Nikkei Asia reported.
Nikkei Asia stated the steerage is decrease than an FnGuide consensus which predicted Samsung’s quarterly working revenue at 1 trillion gained and income at 64.2 trillion gained. The analysis agency collected knowledge from 22 brokerage homes.
Investors welcomed Samsung’s determination to chop reminiscence chip manufacturing, sending the corporate’s shares 4.3 per cent larger to shut at 65,000 gained, Nikkei Asia reported.
Though Samsung acknowledged a worsening in its reminiscence enterprise, it didn’t unveil numbers by sector, Nikkei Asia reported.
Analysts, nevertheless, estimate that its semiconductor enterprise might have posted an working lack of greater than 4 trillion gained within the quarter. Samsung is the world’s greatest reminiscence chipmaker, accounting for about 40 per cent 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 steerage 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 determination to chop manufacturing might assist decelerate the decline of reminiscence chip costs to some extent, however does 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, instructed Nikkei Asia in an e-mail.
“Still, this oversupply is due to weakening demand and high inventory, so Samsung’s production cut is not expected to stimulate sales,” Wang stated, including, “Therefore, Counterpoint believes that the oversupply situation will continue until the third quarter when the market starts to deplete inventory for the fourth quarter seasonal demand.” (ANI)