Profits fall 69%: The chip department pays out huge year-end bonuses, and the industry has a unique conscience
Profits fall 69%: The chip department pays out huge year-end bonuses, and the industry has a unique conscience
As the world's number one Samsung, its position in this recession is also pivotal.
According to the report, Samsung forecasts a 69% decline in third-quarter operating profit from a year earlier, to an eight-year low of $3.4 billion, as the global recession reduces demand for memory chips for IT devices and servers.
According to an industry report, in the fourth quarter of this year, the production of Samsung memory chips increased by about 10%, but its average selling price fell by about 28%. Samsung previously announced that it would not follow Micron's footsteps and make the same decision, which shocked the entire industry.
An analyst at Morgan Stanley said market prices had fallen 47 percent last year due to an oversupply of chips, while the price of NAND chips fell 53 percent. At the same time, Samsung also saw its first full-year loss in its history in the NAND space.
How much does NAND cost? Peter Lee, an analyst at Citibank, said in a report that the current price of NAND flash memory is similar to Samsung's manufacturing cost. This means that, regardless of transportation, sales, sales and other expenses, Samsung's NAND chips are basically losing money when they are sold!
At the same time, Korean media said that Samsung will provide up to 50% of annual dividends to all chip business personnel from the end of this month.
Although memory chip inventory remains high and prices have fallen to the bottom, it is not surprising, after all, the memory chip field is still Samsung's most profitable area, and it is undoubtedly the world's first, if the economic boom reverses, Samsung will still be the most profitable party. Even in the most difficult times, Samsung Electronics accounted for more than 60% of its total revenue in the first quarter.
Compared to wealthy Samsung, its rivals Micron, Western Digital and Beetle have a much tougher picture. The "King of Chips" once published an article saying that Micron's net profit fell by 45% because of "the decline in the number of customers", and then announced that it had cut 10% of jobs worldwide, which forced Western Mathematics and Armor to join forces, and some time ago, restarted merger negotiations.
In addition, bonuses paid by Samsung subsidiaries to employees working in the tablet production department will also account for 47% to 50% of their annual revenue. Employees in the mobile phone business receive bonuses of between 29% and 33% per year; Web Solutions employees will receive a dividend of 22 to 26 percent of their entire salary.
