Samsung faces huge loss of $2.3 billion on chip

Samsung is one of the largest smartphone manufacturers, and on the other hand, the company is doing several other businesses in which the company has dominance as well, like appliances, construction and it is also the main supplier of components of electronics like AMOLED screens, and more, but there are shocking news coming in that the company has lost approximate 3 trillion won ($2.3 billion) from the memory chip business.

The 3 trillion loss only reflects the data of only two months, while according to the Gyenonngi-based chipmaker, the loss can be increased up to 4 trillion won by the end of the first quarter of this year. This loss will be the first major loss which is reported after the crash of the Lehman brothers, which brought about the economic crisis in the world.

According to the JoongAng Daily, last year, the chip division brought in 23.8 trillion won as profit which contributed more than half of the total profit generated by the company, i.e., 43.4 trillion won. Quarterly, the division’s operating profit came in at 8.5 trillion won in the first three months.

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Its a very unfortunate loss for the company, which is facing the DS (device solution) division, which is always considered as the treasure which always brings a great amount of profit every year, but due to the shortage of semiconductor chips, the prices have increased that hits hard at the end of the last year because it affects the main business which includes smartphones, consumer electronics, and displays.

According to the Market tracker TrendForce, DRAM prices will like to increase by 20% in the first quarter and will hike by 11 % in the next quarter, while those of NAND flash chips will see a decrease in price by 10% in the first quarter and 3 % in the next quarter.

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Moreover, the chip industry will be in the same condition throughout the year, but Samsung has taken some steps to overcome this situation; the company has borrowed 20 trillion from its subsidiary department, Samsung display. Which will help in funding the semiconductor investments

But here, the good thing is that Samsung is a very large company that has a very wide expansion of businesses that earns a lot of profit, so even if the memory chip decision incurs trillions of won, the overall balance will remain in profit due to its dominance in smartphones and appliances.