Q1 faces huge losses, Samsung plans to cut production

According to South Korea's daily economic news report, people familiar with the matter said that Samsung is considering reducing wafer investment to reduce DRAM and NAND chip production. The company faced a huge operating loss in the first quarter.

Previously, Samsung had stuck to its production plan while advancing its chipmaking technology in response to rising inventories and slowing demand.

However, with analysts predicting a deeper-than-expected industry slowdown, Samsung is now considering reducing capital spending and chip production to prop up lower prices and ease oversupply. Chipmakers such as Micron and Kioxia have been cutting production since October.

Recently, Samsung posted its worst quarterly operating profit in eight years. Also, Samsung halved its 2023 chip profit forecast, as major chipmakers and their customers struggle to adjust to their high inventory levels. Industry sources said Samsung's first-quarter semiconductor business operating loss could be as high as 1 trillion won ($811 million), compared with an estimated 500 billion won loss in the fourth quarter of last year.

According to industry sources, Samsung Electronics is reducing the production of NAND flash memory by reducing the capacity utilization rate of chips to 90% due to the continued sluggish demand after a period of resistance.