Shulou(Shulou.com)11/24 Report--

October 27, according to foreign media reports, on Wednesday, local time, SK Hynix disclosed in their third-quarter results that they expected the oversupply of memory chips market to continue for some time, so they have also decided to cut investment next year and reduce production.

Specifically, SK Hynix announced in its financial report that its investment next year will be reduced by more than 50% compared with the same period last year, and this year it is expected to be 10-20 trillion won. The production reduction is based on products with lower profits, gradually reducing production, maintaining the trend of reduced investment and production for a certain period of time, and normalizing the balance between supply and demand in the market.

According to the latest South Korean media reports, SK Hynix is not alone in cutting investment or product production. Samsung Electronics and LG Electronics are also cutting production of some products in the face of high inventory. LG, another important company of LG, also plans to cut investment.

According to foreign media reports, Samsung Electronics is cutting smartphone production, lowering its smartphone production target from 330m to 280m, while LG Electronics is cutting TV production to control inventory.

LG, which reported an operating loss of 759.3 billion won in the third quarter, has said it may cut its investment by more than 1 trillion won, with specific plans to be announced in January. LG, which has a clear advantage in large OLED panels such as televisions, shows that the current inventory is worth nearly 4.5 trillion won, and they plan to drop to 1 trillion won by the end of the year.

South Korean media also mentioned in the report that because of high inventories, South Korea's major manufacturing companies are cutting output or investment. The inventory-to-shipment ratio of South Korean manufacturing increased to 124 in August from 111 in the same period last year, higher than the level during the global financial crisis in 2008 and second only to 127.5% during the May 2020 pandemic.

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