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Samsung Electronics Says It Has No Plan to Cut Down on Chip Production
Chip Prices Remain Weak
Samsung Electronics Says It Has No Plan to Cut Down on Chip Production
  • By Kim Eun-jin
  • August 1, 2019, 10:32
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Samsung Electronics says it has no plan to cut down on production of memory semiconductors.

Samsung Electronics has made it clear that it would not cut production of memory semiconductors such as DRAMs. In addition, the global semiconductor giant said it is difficult to assess the impact of Japan's export curbs on its semiconductor business, pledging it would minimize damage through various measures within its reach.

Samsung Electronics held a conference call on July 31 to explain its second quarter earnings. “First, the Japanese government’s action is not an export ban on semiconductor materials, but it weighs on us because it sets new licensing procedures,” a company official said. “There is still uncertainty about the direction the Japanese government would take, so it is difficult to size up its effects," the official said. "In any case, we will do our best to minimize the negative effects."

"We are not considering reducing wafer input at present," he said, adding, however, "We will operate the production lines flexibly in response to the fluctuations in demand."

Regarding the memory semiconductor inventory in the second half of the year, the official said, “The inventory will decline in the second half of the year but it is difficult to predict how quickly it will decrease because of uncertainties in the external environment.” He added that the DRAM inventory turnover rate has dropped due to the resumption of semiconductor purchases by data centers and a trend towards a higher capacity of smartphones. “The NAND flash inventory began to plummet and is expected to reach an appropriate level in the third quarter," he said.

When asked about a recent spike in prices of memory semiconductors, the official said various variables are at work. "It is difficult to say whether the current upward trend will affect long-term (contract) prices,” he said. According to market researcher DRAMexchange, PC DRAM prices fell more than 10 percent from a month ago on the day.

Regarding memory facility investment plans for next year, the official said such plans are still on the drawing board. But he said China's Xian plant would be completed by the end of this year and Pyeongtaek plant in Korea will be completed within next year. As for the foundry business, he said that the planned EUV line in Hwaseong plant will go into operation in the first half of 2020 as scheduled, adding that a 7 nm ultra-violet (EUV) line and an image sensor line (S4) will be additionally built.

In addition, he said the company’s labs are evaluating equipment for the application of the EUV process to production of 1z (10-nanometer, third-generation) DRAMs.

When asked about whether the display production line was partially shut down, he said, "We run production lines flexibly according to market conditions and business strategy."

"We have not yet come up with a concrete plan," he said in reference to a transition from liquid crystal displays (LCDs) to quantum dot-organic light-emitting diodes (QD-OLEDs) displays.