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No plan to cut chip production despite slowing demand: Samsung executive

Corporate Newsroom 10:33 October 06, 2022

SEOUL, Oct. 6 (Yonhap) -- Samsung Electronics Co. is not considering a cut in production of its memory chips despite slowing demand amid concerns over a global economic recession, a senior executive has said.

"There is no internal discussion (about a cut in memory chip production)," Han Jin-man, executive vice president and head of the memory global sales and marketing at Samsung Electronics, said at the annual Samsung Tech Day on Wednesday (U.S. time), currently taking place in San Jose, California.

"Samsung's basic position on this matter is that there should not be artificial production cuts," he said, while stressing that Samsung "is trying to make sure there is neither a chronic shortage nor oversupply of chips in the market."

Samsung Electronics executives attend a media briefing of Samsung Tech Day 2022 in San Jose, California, on Oct. 5, 2022. (Yonhap)

Samsung Electronics executives attend a media briefing of Samsung Tech Day 2022 in San Jose, California, on Oct. 5, 2022. (Yonhap)

His comments came as U.S. chipmaker Micron Technology said it would cut capital spending by up to 30 percent and chip equipment spending up to 50 percent to slow supply growth in fiscal year 2023.

It is "prudent" to "bring our supply in line with demand" in the current "unprecedented" environment that has impacted demand and caused "the unprecedented level of inventory adjustments by our customers," Micron CEO Sanjay Mehrotra said during the company's earnings call late last month.

Micron posted weak earnings for its fourth quarter of fiscal year 2022, with sales decreasing 19.7 percent on-year on weak consumer demand amid high inflation in major economies.

Micron is the world's third-largest DRAM maker with a 24.8 percent market share, trailing behind industry leader Samsung with 42.7 percent and runner-up SK hynix Inc. with 27.1 percent, according to global market researcher Omdia.

The U.S chipmaker's performance is closely watched as an early indicator of the chip market's strength ahead of earnings results from Samsung and SK hynix, which will announce their third-quarter results late this month.

On the U.S.-led "Chip 4" initiative with South Korea, Japan and Taiwan, aimed at strengthening Washington's access to semiconductors and weakening that of China, Han refrained from going into the sensitive issue.

"It is an inter-governmental issue," he said, adding that Samsung "is closely watching any development."


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