Samsung’s profitability in recent years announced a 95% decrease. The company, which experienced a huge decrease in revenue, decided to continue its production cuts after the losses in the first half of the year.
Global economic conditions and various other factors, especially those that derive most of their income from semiconductor and chip manufacturing. SamsungIt put him in a difficult situation. The firm said that the worst period in the global memory chip market is over, but plans to extend production cuts as the recovery in demand is largely limited to high-end chips used in artificial intelligence.
SamsungThis strategic move highlights the unprecedented semiconductor decline, which has resulted in the firm’s record operating losses of $7 billion from its chip business in the first six months of this year.
Global Economic Slowdown and Decreased Demand
The global economic slowdown and high interest rates have dampened demand for most consumer goods that have exploded after the pandemic. The world’s largest memory chip manufacturer Samsungforecasts industry-wide production cuts to continue into the second half, with demand gradually recovering as customers continue to deplete their chip stocks.
Artificial Intelligence Driven Chip Demand and Samsung
Samsung‘s chip division recorded a significant loss in the April-June quarter compared to the previous year. However, artificial intelligence-driven DRAM demand took a sigh of relief as the decline stopped and the damage eased a bit. However, analysts SamsungHe states that it is trying to catch up with companies like SK Hynix, which are better prepared for the artificial intelligence-focused chip demand.
Although Samsung was the first company to produce high-density chips, it could not predict that these markets would grow so fast and fell behind SK Hynix in terms of speed and efficiency. The firm said it has received more than 1.5 billion gigabytes of HBM product orders this year and is working to increase its supply capacity.
Samsung lost 95 percent of its operating profit this quarter. On top of this situation, the company aims to increase its profitability with various strategic plans and practices.
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