Samsung Electronics Co’s pledge to cut memorychip production has lifted shares of rival manufacturers because the move could potentially ease a supply glut that has hammered prices across the industry.
Samsung on Friday last week said that it would cut production to a “meaningful level” after reporting its smallest profit in more than a decade.
US chipmaker Micron Technology Inc’s shares rose 8 percent on Monday in New York, their biggest single-day jump in more than a year. Shares of Western Digital Corp also gained 8.7 percent, their best performance in more than two months.
Photo: AFP
ECONOMIC WOES
The post-COVID-19-pandemic slump in demand for consumer electronics, along with broader economic shocks such as rising inflation, have squeezed producers.
International Data Corp on Sunday reported that PC shipments globally tallied 56.9 million in the first quarter of this year, 29 percent less than the same period a year earlier, as the PC market suffered from weak demand, excess inventory and a worsening macroeconomic climate.
Samsung had resisted pulling back on production despite the downturn, in part to take market share from competitors such as Micron.
IMBALANCE
The announcement on Friday last week “adds light to the tunnel,” Stifel, Nicolaus & Co analyst Brian Chin said in a research note.
The move might “help turn around the largest memory supply imbalance in decades.”
Prices of DRAM — a type of memory used to process data — are expected to fall about 10 percent this quarter, Yuanta Securities Co (元大證券) analyst Gilhyun Baik said.
That follows a roughly 20 percent slide in the previous three months and a more than 30 percent drop in the fourth quarter of last year.
Additional reporting by AFP
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