Samsung Electronics Co. dismissed an artificial reduction in wafer input. This is because it may deal with line optimization and other upgrading efforts.
A Korean brokerage also assumed it could naturally lead to a fall in chip production.
In a report, Samsung Securities Co. indicated that some investors were raising doubts about the Korean memory chip giant’s supply plans.
It was after it has exposed in its recent earnings call that it would not artificially cut wafer input.
News reports said, “What Samsung Electronics was really trying to say may be that rather than intentionally scaling down wafer input.”
In addition, “It could gradually adjust production and inventory through line optimization and procedure realignment.”
In a conference call after its earnings report meeting, Samsung Electronics stated it was “not considering any artificial decrease in wafer output.” But it added “we will operate our lines flexibly in response to market changes.”
Meanwhile, some analysts have also understood “flexible operation” as denotation to upgrading production lines by shifting components or re-aligning equipment.
This would require temporary suspension of operations, a move that will affect output.
Price Conspiracy Charges
The world’s largest memory chipmaker may have been cautious of accusations of price collusion as noted by the brokerage.
This is if it joins some associates that have already declared plans to cut chip production amid plunging memory prices from the supply surplus and declining demand.
Last week, Samsung’s smaller domestic rival SK Hynix Inc. declared it would cut back dynamic random-access memory (DRAM) chip production.
The U.S.-based Micron Technology Inc. is also known as the world’s No. 3 memory chipmaker. It said it would trim its DRAM output by 5 percent this year in March.
The Korean memory giants both have seen their operating profit more than halve in the second quarter. It was hurt by the sharp chip industry slump and the ongoing U.S.-China trade war.
Japan’s recent move is to limit the country’s exports of three high-tech materials. These are all essential in manufacturing semiconductors and displays added further weakness to Korean chip makers.
These chipmakers rely heavily on Japanese suppliers for materials.
Recent Records of The Falling Operating Profit
From a year ago, Samsung Electronics’ operating profit in the April-June period dropped 55.6 percent, with its semiconductor unit taking a 71-percent hit in earnings.
SK Hynix also reported its thinnest quarterly earnings in three years, with operating profit plunging 89 percent on year.
The falling memory prices have weighed on the chipmakers’ bottom line.
In July, DRAM fixed prices slipped 11.2 percent from the previous month to $2.94. According to DRAMeXchange, a memory chip market tracker, it has tumbled below $3 for the first time in nearly three years.
Elsewhere, a new mobile app and special edition accessories were unveiled to raise awareness of the Sustainable Development Goals
Today, Samsung Electronics and the United Nations Development Programme (UNDP) announced a new partnership in support of the Sustainable Development Goals (SDGs). This is also known as the Global Goals.
The Global Goals discuss about some of the biggest challenges faced around the world. This comprises those related to inequality, climate and environmental degradation, and education.