June 08, 1998 in Social Responsibility News

SAMSUNG Electronics Decides to Cut DRAM Production

SEOUL, Korea - June, 8, 1998 - Samsung Electronics Co., Ltd., is responding to the worldwide glut in the semiconductor market and subsequent falling chip prices by suspending all memory chip production and most non-memory chip production between June 14 and 20. Holding 19% (22% for 64M DRAMs and 11% for 16M DRAMs) of the world memory chip market, Samsung Electronics is the top producer, hence the company's decision to suspend operations is expected to have a major impact.

The 7-day suspension will affect all memory fabrication lines at the Kiheung plant and memory assembly lines at the Onyang plant. Most non-memory lines (except those filling orders already received) are also scheduled to go down. As a result, this operational suspension will be the largest ever.

Because of the suspension for memory chip production, from June until the global DRAM prices stabilize, more than 25% of Samsung Electronics' world memory chip supply will be reduced. This is expected to have a strong psychological effect on the market and help to turn prices around.

Moreover, Samsung Electronics will curtail production of SRAMs, flash memory chips, non-memory devices and other key products for seven days. Therefore, the price impact will go far beyond the DRAM markets.

Samsung Electronics has already decided on times and approaches to ensure that customers with long-term supply contracts do not suffer any ill effects from the June production suspension. The company will continue to cut back on production until the chip supply glut has been resolved.

In Samsung Electronics Co., Ltd., there are three main business units:
. Multimedia & Home Appliances
. Semiconductors
. Information & Telecommunications.

Samsung Electronics Co., Ltd., a US $13 billion (1997) flagship company of Korean-based the Samsung Group, is a world leader in electronics, with operations in more than 60 countries and 85,000 employees Worldwide.


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