Samsung won't chop DRAM production

In spite of 75% profit slide

By Robert Blincoe • Get more from this author

Posted in Business, 22nd October 2001 10:50 GMT

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Samsung has been hit with a 75 per cent Q3 profit slump thanks to memory prices sliding down the toilet.

But it's not going to cut production to try and jack up prices, preferring, like Micron, to try and force weaker rivals like Hynix out of the market.

The outlook according to analyst firm Gartner is that the DRAM market will shrink 19 per cent next year, a slight improvement on this year which is seeing a 67 per cent sales slide.

Samsung believes its size will carry it through the downturn, but it will chop spending on the chip business by 10 per cent to 4 trillion won ($3 billion), according to VP of investor relations Chu Woo Sik, speaking on a conference call and quoted by Bloomberg.

Net profits for the quarter abseiled to 420 billion won ($323 million) from 1.7 trillion ($1.3 billion) a year earlier. The chip business suffered a 380 billion won ($290 million) loss.

Samsung's telecommunications unit, the mobile phone and networking parts of the business, increased operating profit 20 percent from the previous quarter to 360 billion won.