Samsung is one of the world’s largest producers of semiconductors and has largely little to no change to the company’s production output despite a continued slowing economy. That is no longer the case as the company has finally made the decision to reduce semiconductor production after losing billions.
Samsung announced that the company’s operating profits within the semiconductor industry dropped by 96% in the first quarter of this year, signaling to the company that it is not immune to the slowing economy. This has been the biggest drop for the company in the past 14 years.
Prices for semiconductors fell around 20% during the first quarter of this year and estimates believe that those prices will continue to fall another 5-15% moving forward into the second quarter. During the price decline and lowering demand, Samsung refrained from cutting output and was thus left with significant overstock.
Samsung has yet to announce what exactly the coming output cuts are going to look like but the company has stated that moving forward they will be focused more on the future investment of the company through research and development.
Source: Financial Times