According to the report, SK Hynix disclosed in their third-quarter financial report that they expected the oversupply of the memory chip market to continue for some time. Specifically, SK Hynix announced in its financial report that its investment next year will be reduced by more than 50% year-on-year.
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This year, it is expected to be 10-20 trillion won. The production reduction will focus on products with lower profits and gradually reduce production. Maintain the trend of reduced investment and reduced production for a certain period of time to normalize the balance of supply and demand in the market.
Judging from the latest reports from the Korean media, it is not only SK Hynix that has cut investment or product output. In the case of high inventory, Samsung Electronics and LG Electronics are also cutting the output of some products.
Moreover, the sources said in the report that Samsung Electronics is reducing the production of smartphones, lowering the production target of smartphones from 330 million units to 280 million units; LG Electronics is cutting TV production to control inventory.
LG Display, which posted an operating loss of 759.3 billion won in the third quarter, has indicated that they may cut investment by more than 1 trillion won, with specific plans to be announced in January next year.
LG Display, which has a clear advantage in large-size OLED panels required for TVs and the like, currently has an inventory valued at nearly 4.5 trillion won, which they plan to drop to 1 trillion won within this year.
The Korean media also mentioned in the report that due to high inventories, major South Korean manufacturing companies are cutting output or investment. The level at the time of the global financial crisis in 2008 is second only to 127.5% in May 2020 during the pandemic.
