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Samsung not to cut memory chip output despite slumping business

Samsung not to cut memory chip output despite slumping business

Posted August. 01, 2019 07:43,   

Updated August. 01, 2019 07:43


Samsung Electronics Co. said on Wednesday that it will not reduce its semiconductor production, although its operating profits tumbled by 70.7 percent during the second quarter of this year from a year earlier.

Samsung’s slump in the semiconductor business is attributed to the continuing fall in memory chip prices including dynamic random access memory (DRAM) chips. According to market research firm DRAMeXchange, the average fixed price of DRAM chips stood at 2.94 U.S. dollars at the end of July, falling below the 3-dollar mark for the first time since the end of June 2016. Due to the slumping memory chip business, other major chipmakers such as SK Hynix of Korea and Micron Technology of the U.S. have decided to cut outputs to deal with a supply glut.

However, Samsung will try to overcome the crisis by further enhancing its technological competitiveness by shifting to a 1y nano process. Chun Se-won, an executive vice president for the company’s Device Solutions Division, stressed that Samsung is not considering artificially reducing wafer inputs.

Regarding Japan’s restrictions on exports of key semiconductor materials to South Korea, he said, “Although Tokyo’s move is not an export ban, there are burdens regarding new permit procedures. It is difficult to gauge the impact due to uncertainties about future direction.” He added that Samsung is drawing up various measures to minimize the impact from Japan’s export curbs.

Dong-Jun Heo hungry@donga.com