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On Friday April 7, Samsung Electronics announced a very significant drop in its operating profit in the first quarter of 2023. As a result, the company decided to reduce its production of memory cards. A drastic and unexpected decision on the part of the sector leader, who had previously assured that he would not take this direction yet taken by his competitors. Cuts due, according to Samsung, to a very sharp drop in global demand.
With our correspondent in Seoul, Nicolas Rocca
A 96% drop in profit compared to the first quarter of 2022: the first results of Samsung Electronics this year appear rather worrying. In fact, they are the worst for fourteen years. As a result, South Korea’s largest conglomerate announced a ” significant reduction of its chip production.
Sudden and unusual, the decision joins that of its main competitors. The world leader in the sector had mentioned possible adjustments to cope with the drop in consumer purchases in the context of high inflation, but had rejected the idea of cutting production. During the Covid-19 pandemicsmartphone and computer makers had amassed large inventories of chips to meet rising demand, and they are now looking to deplete.
Paradoxically, the Samsung price jumped 4.5% on April 7, and that of its competitor, SK Hynix, by more than 6%. Investors seem to be betting on a market rebound in the next quarter, as chip prices have fallen 70% in the past nine months. Despite this announced drop in production, Samsung is maintaining its long-term investments in an attempt to preserve its technological lead.
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