Extends Production Cuts amid Chip Market Recovery. Samsung Display has filed a lawsuit against its Chinese competitor, alleging the infringement of five mobile phone display patents, one of which is used in Apple’s iPhone 12.
Meanwhile, Samsung Electronics, the world’s largest memory chip maker, announced that the worst is over for the global memory chip market, but it will continue production cuts due to demand recovery being mostly limited to high-end chips utilized in artificial intelligence.
The semiconductor downturn has been unprecedented, resulting in a massive 8.9 trillion won ($7 billion) operating loss for Samsung in the first half of the year from its chip business.
Although the current quarter is expected to see the company remain in the red, the loss is anticipated to halve to 2.3 trillion nearly won compared to the second quarter.
The global economic slowdown and high-interest rates have dampened demand for consumer goods following the pandemic-induced boom, leading to continued production cuts across the industry. Samsung expects demand to recover as clients reduce their chip inventory gradually.
The company’s memory chip stocks have rapidly decreased since reaching their peak in May.
These announcements have eased concerns about chip oversupply, leading to a 2% increase in Samsung shares.
Smaller rival SK Hynix’s shares surged by 9% to their highest level since March 2022. SK Hynix, which plans to cut NAND output by 5% to 10%, is expected to benefit more from these efforts due to its heavy exposure to those chips.
Analysts predict that supply cuts could stabilize NAND prices, relieving SK Hynix, which has been facing weakness in the NAND segment and reporting a quarterly loss of nearly 2 trillion won.
Samsung Electronics remains cautious about the current quarter’s performance, but the gradual recovery of the memory chip market brings some optimism to the semiconductor industry.