Chip crisis: Samsung is in trouble


Samsung, the world’s largest memory manufacturer, is facing a multi-billion dollar loss in its DRAM business. The main reason is the global crisis in the technology products market. However, the bulk of the loss seems to have been made in the last quarter that has just ended. According to the Korea JoongAng Daily, sources inside the company report that this is the first loss since 2008, when Samsung had to deal with the effects of the global financial and economic crisis following the collapse of Lehman Brothers bank. At the origin of these troubles, Samsung but also other players such as SK Hynix, seem to have decided to ignore the strong slowdown of the market many months ago by betting on a quick recovery. A few days ago, both companies reported very high inventory levels to the South Korean authorities, confirming that a large part of the difficulties stemmed from a strategic error.

HotChips 2021 Samsung DDR5 7.2 GBPS

Samsung: overly optimistic management?

Despite the current chip crisis, Samsung remains one of the major players in the memory market. The company has a strong presence in the smartphone and laptop market and is also a major supplier to data centres and supercomputers. Nevertheless, Samsung remains confident about the future of its memory business. The company continues to invest in the research and development of new memory technologies, such as NAND flash memory and HBM memory, which are used in AI, supercomputing and data centres. The restart of the “classic” business is also expected to be imminent according to some analysts, as accumulated stocks are about to disappear.