A sharp drop of 96%! Samsung was forced to make its first decision since its establishment, but Korean media said it couldn't bear it after all

We sincerely invite you to click on 'Follow' and receive exciting content and see different stories every dayNowadays, the development of high-end technology is increasingly valued by everyone, and many countries have also focused their development on this field.When it comes to South Korea, the first thing that comes to mind is definitely Samsung, which is the largest chaebol group in South Korea

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Nowadays, the development of high-end technology is increasingly valued by everyone, and many countries have also focused their development on this field.When it comes to South Korea, the first thing that comes to mind is definitely Samsung, which is the largest chaebol group in South Korea.

Samsung not only has a position in South Korea, but also has a certain influence internationally. It has mobile phones, chips, and other products, covering multiple fields.Samsung's revenue has been declining for the past two years, and this year it has dropped by 96%. In the end, it made its first decision in 25 yearsWhat exactly is it?

Countries such as Europe and America have started the chip industry relatively early, so they have also achieved good results,Japan and South Korea have always followed the lead of the United States, so they have also received a lot of technical assistance.

Samsung can be described as a powerhouse in the storage chip industry, as it quickly seized market share,At that time, chips and electronic products were sold around the world, and Samsung smartphones in China were also popular for a few years.

After the outbreak of the global economic crisis, companies in various countries have been affected to a certain extent, and Samsung's sales have also severely decreased.There are also certain quality issues with Samsung's products during use, such as overheating and self explosion of mobile phone batteries.

This has led to a bottleneck period for the development of Samsung, which once had unlimited potential,Especially after entering this year, the company's revenue has dropped to its lowest point.

From the latest data,Samsung's operating profit plummeted by 96% again in the second quarter of this year, to only 1100 billion Korean won, which is approximately 630 million yuan in Chinese yuan.

In the eyes of ordinary people, this is an astronomical number, but for Samsung, an international enterprise, it is the lowest point ever.In just one quarter, the profit plummeted by 600 billion Korean won, which can be said to be a fatal blow to the company.

In fact, the sharp decline in Samsung's revenue did not happen suddenly,Since 2021, Samsung's profits have been declining, but the decline this year has been relatively significant.

The reason for this phenomenon is closely related to the decrease in international demand for storage chips,And before, Samsung's main market was China.

In recent years, China has increased production and research and development in the field of chips, and now domestic storage chips have begun to take shapeAnd with certain achievements in this field, the demand for imported chips naturally decreased.

The development and technological innovation of China's storage chip enterprises have brought great impact to SamsungCompared to imported chips, domestically produced chips will have a greater advantage in terms of price and after-sales service.

Another reason is that,In the past two years, the United States imposed extremely strict sanctions on Huawei, and even jointly revised chip laws with multiple countries in order to make its actions legitimate.

I was originally trying to suppress Chinese companies, but I didn't expect this to have an impact on the international chip industryEven Qualcomm, Intel, and others have seen sales decline, forcing them to implement layoffs and salary cuts, and Samsung cannot escape.

The US sanctions have affected Samsung's downstream demand,The severe decline in market sales and the inability to sell products naturally result in no profit, which has become a driving force for the development of Chinese enterprises.

The United States has also strengthened its management system for international chips, and many chip manufacturers have been heavily punished by the United States,In the first quarter, Samsung was fined 400 billion yuan by the United States.

The operation of enterprises requires upfront costs, and when expenses and revenue cannot be balanced, they must make adjustments. Faced with the current crisis of enterprises,Samsung was forced to make its first decision in 25 years, which was to reduce production of storage chips.

It is reported that it will reduce production of such chips by over 25% in the second half of this year,This is the first official production reduction implemented since the 1998 financial crisis.

This is the most effective and direct way for it to respond to this crisis,This can effectively alleviate the imbalance in market demand and stabilize the price of storage chips as soon as possible.

Due to the market being in a state of oversupply, the price of storage chips has been falling again and again, resulting in little profit for enterprises.But doing so also indicates that Samsung's share in the international market may decrease.

Previously, Samsung had a 40% share of the storage chip market internationally,There are other competitors in this field, but due to their insufficient influence, they have not been able to shake Samsung's position.

After making this decision, Samsung's advantage will gradually be weakened, which brings opportunities to other competing companies.For Samsung now, in addition to reducing production of storage chips, it is also necessary to innovate in technology in order to maintain its own advantages.

summary

After seeing Samsung's decision, the South Korean media also expressed that they couldn't bear it after all,Now Samsung is in a passive situation. After making this decision, it will definitely give it a breathing opportunity in the short term, but it also brings greater pressure to Samsung.To survive in this field, Samsung must increase its research and development efforts and produce new results as soon as possible. Its development has also raised awareness for other chip companies. What is everyone's opinion on Samsung's future?

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