The semiconductor chip market is going through its worst period in over a decade. Prominent players in this category, like Samsung, are facing huge losses because of this economic downturn in the semiconductor industry. Samsung recently posted its lowest profit in 14 years, thanks to low chip demands. To support its companies, the South Korean government has vowed to give its all-out support to the local semiconductor makers to survive this down period.
Now, according to analysts, there is some good news for Samsung. It is reported that Samsung may see its semiconductor chip market share grow even without cutting down its production. Samsung announced it would cut memory production, going against its policy of no artificial production cuts.
Samsung's decision to lower semiconductor production will reap future benefits
However, analysts believe that Samsung suddenly decided to cut down semiconductor production to a meaningful level as it has already achieved significant results, including the desired market share. As per reports, Samsung decided to set a goal of a market share lower than 50%, and it is forecasted that the market share will be around 47% in Q1 2023, up from 45.1% in Q4 2022.
Samsung decided to lower its semiconductor production based on its judgment that its market share gap with its competitors has sufficiently widened. In Q1 2023, the decision to go for zero production cuts had a positive impact on Samsung's market share. Of course, the no-production cut policy comes with its disadvantages, such as massive inventory.
But Samsung sees an opportunity here. Firstly, the massive inventory cannot be ignored in such crucial times. And secondly, it will be able to better respond to an upturn in the semiconductor industry in a timely manner. Industry insiders believe that the semiconductor market will rebound in the second half of the year, and Samsung's performance will improve as it already has sufficient advanced process products as well as existing products.
