South Korea's chip production is at a 14-year low! Memory chips such as SSDs suffer big price cuts
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Update time : 2023-01-05 12:55:44
South Korea saw its biggest drop in semiconductor production in November since the global financial crisis, dragging down the country's industrial output and signaling further cooling overseas demand for technology components as the global economy slows.
Data released by the Korea Statistics Office on Thursday showed that chip production fell 15% year-on-year in November, shrinking for the fourth consecutive month and marking the biggest decline since 2009. South Korea's overall industrial output shrank 3.7% in November from a year earlier, the biggest drop since the COVID-19 pandemic began.
For South Korea, the price of memory chips has been falling, but there are still not many people buying them, which has brought a greater impact on Samsung and SK Hynix. According to Hynix, the price of DRAM chips used in equipment and servers fell by about 20% in the third quarter compared to the second quarter, and the price of NAND flash memory chips used for data storage fell by more than 20%.
Hynix predicts that the industry will continue to oversupply in the short term, and with this in mind, the company has decided to reduce capital expenditures by more than 50% next year compared to this year. This year's investment scale is expected to reach the upper limit of the 10 trillion-20 trillion won range.
Samsung has also frequently warned recently that it faces tougher market conditions as demand for PCs and smartphones weakens further than expected, leading data center and consumer technology customers to cut orders and build inventories.
