Samsung is being reported that it is shutting down 30% of its 8-inch factory machines due to sluggish demand in the IT industry. The company has been forced to take this step to reduce losses in Q3 2023.
Previously, the Korean media TheElec has reported that the current IT industry demand is low, the Korean foundry also decided to 8-inch wafer services cut prices by 10%. As of the second quarter, Samsung Electronics foundry business Samsung Foundry, South Korean foundry industry Key Foundry capacity utilization rate are between 40 ~ 50%.
8-inch wafer service mainly produces power management IC, panel driver IC, microcontrollers, etc., due to consumer electronics demand is still not clear, in order to save costs, Samsung Foundry has been 3 into the machine downtime. However, the market is expected, the overall manufacturing and semiconductor industry has been more than a year and a half of inventory adjustment, smart phones, PC, consumer electronics and other three major industries supply chain before the end of the year is expected to meet the inventory replenishment tide.
The IT industry has been facing a slowdown in demand due to macroeconomic uncertainties and a global economic slowdown. Samsung Electronics has reported that the business environment deteriorated significantly in Q4 2022 due to weak demand. The Memory Business and System LSI Business saw a decline in earnings as prices fell and customers continued to adjust inventory. The Foundry Business posted a new record for quarterly revenue while profit increased year-on-year on the back of advanced node capacity expansion as well as customer base and application area diversification. Samsung Display Corporation (SDC) saw earnings in the mobile panel business decline as smartphone demand fell while the large panel business narrowed its losses as sales of QD-OLED for TVs increased and as the business’s LCD inventory was fully depleted.
In conclusion, Samsung Electronics’ decision to shut down 30% of its 8-inch factory machines is a direct result of sluggish demand in the IT industry. The company’s decision is expected to reduce losses in Q3 2023. The IT industry has been facing a slowdown in demand due to macroeconomic uncertainties and a global economic slowdown. Samsung Electronics’ Q4 2022 financial results reflect this trend. While some businesses have seen a decline in earnings, others have posted record revenue. It remains to be seen how the IT industry will fare in the coming months.
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