Samsung Memory Chip Business To Lose US$3.04 Billion This Quarter
Samsung is expected to report an operating loss of US$3.04 billion (~RM13.61 billion) during the first quarter of this year alone for its memory chip division, and there’s a month to go before it’s over. In the first two months alone, the Korean tech giant said that the division’s losses were already sitting at US$2.3 billion (~RM10.30 billion).
“Internally, there was a report projecting up to 4 trillion won in operating losses from the memory chip business in the first quarter,” a source within Samsung told the Korean news publication, JoongAng Daily. In retrospect, this is the first time the brand will be reporting a loss in 15 years. The last time it reported a loss was back in 2008, during the financial crisis that saw the bankruptcy and shuttering of Lehman Brothers.
If that wasn’t bad enough for Samsung and its memory chips division, what does add insult to injury is that the rest of its semiconductor division, which has actually been turning a profit, is unlikely to help the memory chips division to offset the losses. Then, almost as though to pour salts into an already gaping wound, a recent forecasting report by TrendForce predicts that the prices of DRAM are expected to fall approximately 20% during this quarter, followed by a further 11% in the next quarter. And that’s on top of the 34% decline in DRAM prices that occurred during the second half of 2022.
And if that doesn’t paint a picture of just how desperate Samsung’s situation with its memory chips division is, the Korean giant was forced to borrow money from its Display division, in order to cover its continued investments within the semiconductor business.
“The move was inevitable given that its cash cow Device Solutions (DS) division is expected to suffer a loss for the first time in 15 years and overseas subsidiaries have most of the company’s cash reserves,” Jeff Kim, an analyst at KB Securities, said.
(Source: JoonAng Daily, Techspot)
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