The sluggish demand and price declines in the market for memory chips have significantly eaten away at the industry leader Samsung in the first quarter of 2023. The surplus collapsed by 86 percent year-on-year to 1.57 trillion won (about 1.06 billion euros), as announced by the electronics giant from South Korea, which is also the market leader in smartphones. Sales fell 18 percent to 63.75 trillion won (43.2 billion euros).
According to the information, the chip division reported an operating loss in the months of January to March for the first time in 14 years. The deficit was 4.58 trillion won.
The chip industry has been struggling with falling prices and an oversupply for a long time. The high level of inflation had also dampened consumer sentiment, which also weighed on semiconductor producers. They also felt the consequences of high customer inventories.
Results “significantly decreased”
The results “reduced significantly” compared to the fourth quarter of 2022 due to further price declines and a rising valuation loss, which also includes so-called dram memory chips, Samsung said in a statement. The chips are used in computers and game consoles, among other things.
Samsung expects demand to gradually recover in the second half of the year. Then the inventories at the customers should also be smaller. However, the same market conditions as in the first quarter are expected to prevail in the second quarter. In response to the weak phase, Samsung had recently reduced the production of semiconductor memories in a departure from its previous position.
The smartphone market is also affected by falling demand. Overall, the market shrank by twelve percent in the first quarter, according to calculations by the analysis company Canalys. According to the calculations, Samsung had a market share of 22 percent, closely followed by its US competitor Apple with 21 percent. According to Samsung, however, the market for premium devices has grown in both volume and value. Looking ahead to the rest of the year, it was said that concerns about the economic downturn would be combined with hopes for better market conditions in China.
