Samsung closes almost 50% of production lines to reduce losses
Samsung has many divisions that deal not only with the production of phones and TVs, but also in the production of ships and the construction of residential buildings. Samsung Semiconductor, responsible for chip production, is struggling with problems – it has already closed 30% of its production lines, and will close almost half of them by the end of the year.
Samsung Electronics’ semiconductor segment, which reported a loss of one trillion won in the third quarter, is gearing up for major belt-tightening and loss reduction. This is an astronomical amount over USD 700 million loss in one quarter alone.
The decision has already been made to shut down more than 30% of the 4, 5 and 7nm chipset production lines at the P2 and P3 factories on the Pyeongtaek campus, and by the end of the year, exclusions will cover almost 50%. Decisions on exclusions will depend on current customer orders, and demand for Samsung chips is unfortunately poor.
Although Samsung Semiconductor is The world’s 2nd largest semiconductor manufacturer, which translates into only 11% of global production in a market 62.3% dominated by TSMC. The Korean company has problems with obtaining orders from technology giants such as Nvidia, AMD and Qualcomm.
Samsung is pulling the plug on factories
In this situation, the best solution is clearly to turn off production equipment and save on energy costs rather than keeping them on standby
Outwardly, there is talk of reducing the utilization rate of devices, but in reality the lines are gradually being shut down. The plan is to stop equipment operation by 50% by the end of the year
– says one of the representatives of the semiconductor industry, quoted by ChosunBiz
Another difficulty for Samsung turned out to be a small number of orders from Chinese semiconductor design companieswhich had a significant share in orders for 4nm and 5nm processors. Tightening U.S. restrictions on the Chinese semiconductor industry have resulted in the postponement of many projects that Samsung was counting on.
The fact that chips produced by TSMC went to Huawei may prompt the US to further tighten export controls in allied countries. The total operating loss of Samsung Semiconductor and LSI in the third quarter was approximately 2 trillion won, or nearly $1.5 billion.
All hope in 2nm?
We reported on the critical situation at Samsung Semiconductor at the beginning of October. The Koreans then argued that in 2025 they would start with the 2 nm technological process, and in 2027 with 1.4 nm. All this to catch up with the mighty TSMC.
