Samsung cuts chip production as profits implode

Samsung
(Image credit: Samsung)

As if we didn't already know that the tech industry isn't exactly coining it, the latest tale of woe comes from Samsung with the announcement of plans to cut memory chip production following a massive dip in profits of 95% in the first quarter of this year.

The bad news for PC gamers is that Samsung is such a big player in the market, analysts think the move will push prices up. Samsung had reportedly held back from cutting production until now, despite a glut of memory chips on the market, with rivals including SK Hynix having already cut production.

"Because it is adjusting production and lowering memory-chip output to a meaningful level, the supply-demand situation can improve much faster," Baik Gilhyun, an analyst at Yuanta Securities Co, told Bloomberg.

Still, that won't happen overnight. DDR memory prices are expected to keep falling for at least another quarter having already tumbled by around 50% in the last six months.

Peak Storage

SATA, NVMe M.2, and PCIe SSDs on blue background

(Image credit: Future)

Best SSD for gaming: the best solid state drives around
Best PCIe 4.0 SSD for gaming: the next gen has landed
The best NVMe SSD: this slivers of SSD goodness
Best external hard drives: expand your horizons
Best external SSDs: plug in upgrades for gaming laptops and consoles

Funnily enough, Samsung's share price actually jumped by 6% in reaction to the production cut and profit warning announcement. That's in part because the markets likely expected and had already priced in even worse news, but also down to anticipation that the production cut will help to bolster prices.

Samsung reportedly managed to just maintain profitability of late due to bumper sales of its latest Galaxy S23 smartphones, but the broader performance of the tech industry remains pretty grim.

That should mean even lower prices of all kinds of PC components, not just DDR memory, over the next six months before the market stabilises and prices begin to recover. Worth bearing in mind if you're in the market for a new rig or an upgrade.

Of course the exception to all this remains those pesky megabucks GPUs. Can sky-high Nvidia and AMD graphics card prices really hold out against these ever-building market forces? We hope not, that's for sure.

Jeremy Laird
Hardware writer

Jeremy has been writing about technology and PCs since the 90nm Netburst era (Google it!) and enjoys nothing more than a serious dissertation on the finer points of monitor input lag and overshoot followed by a forensic examination of advanced lithography. Or maybe he just likes machines that go “ping!” He also has a thing for tennis and cars.

Read more
A photo of MSI Shenzhen motherboard production facility
In a first tariff-induced hit against the PC gaming sector, ASRock is talking about increasing costs and moving its graphics card manufacturing away from China
Nvidia RTX 5090 Founders Edition graphics card on different backgrounds
MSI says that the supply of its RTX 5090 cards will be very tight, due to a limited supply of GPUs from Nvidia
A promotional image showing multiple Corsair Vengeance CUDIMM memory sticks on a desk
Corsair rolls out its first CUDIMM memory sticks for Intel Arrow Lake gaming PCs and they're as pricey as you'd expect them to be
WD Black SN850X SSD on a gaming PC case.
Looks like we won't be seeing Western Digital SSDs in our gaming PCs as the company hands the reins back over to SanDisk
A collection of NVMe SSDs on orange.
Best cheap SSD deals for gaming today
jen-hsun-shiny-jacket
Amidst a barren GPU market and talk of 'supply constraints', Nvidia's end-of-year earnings call gives a glimmer of hope for RTX 50-series graphics card stocks this quarter
Latest in Memory
A photo of Corsair's Vengeance DDR5-8400 CUDIMM memory kit
Corsair Vengeance DDR5-8400 CUDIMM review
Corsair's personalized memroy on a gradient
Corsair's new 'personalised RAM' gives you the option to pick the look and speed of memory you hide in the case anyway
A promotional image showing multiple Corsair Vengeance CUDIMM memory sticks on a desk
Corsair rolls out its first CUDIMM memory sticks for Intel Arrow Lake gaming PCs and they're as pricey as you'd expect them to be
Corsair Vengeance RAM sticks
We've more or less hit RAM price equilibrium: this 32 GB 6000 MT/s DDR5 kit is closing in on the price of a comparable DDR4 kit
G.SKILL DDR5
G.SKILL and Kingston break the 12,000MT/s DDR5 memory barrier with Intel's new Arrow Lake CPU
A pair of Team Group DDR5-RAM kits against a teal background with a white border
Need some speedy DDR5 for a new build or gaming PC upgrade? This Team Group 32 GB kit is just $86
Latest in News
An image of a golden first place award from Geoguessr
'We're actually getting GeoGuessr on Steam before GTA 6': the Google Street View puzzler arrives on Valve's platform this April
Napster client circa 1999
Former music-pirating platform Napster to be reborn rather ironically as a metaverse for musicians to connect with their fans after $207 million deal
The snazzy red and black HyperX Cloud Alpha wireless headphones float in a teal void. The microphone is attached to the headset.
The best wireless gaming headset is now even better in the Amazon Big Spring Sale, boasting a more than $50 discount
A chip being held up in an Intel fab
Intel is reportedly 'working to finalize commitments from Nvidia' as a foundry partner, suggesting gaming potential for the 18A node
Amazon box
Don't panic! The 'Do Not Send Voice Recordings' option Amazon just removed was only used by 0.03% of customers and they can still have it
Digital generated image of people surrounded by interactive transparent and glowing panels with data. Visualising smart technology, blockchain and artificial intelligence
Now I shall demand the cookies! Proposed new browsing agreement turns the tables and lets users dictate terms to websites