Samsung likely to narrow chip losses

Seoul: Samsung Electronics is expected to reduce its chip deficit in the third quarter, thanks largely to a continued cut in its chip output, according to analysts.

Samsung, the world's largest memory chip maker, slashed its chip production early this year, belatedly joining its peers, like SK hynix Inc. and Micron Technology Inc., which started to cut production late last year, to resolve a persistent supply glut.

Analyst Kim Dong-won at KB Securities forecast Samsung's Device Solutions (DS) division, which oversees its cash cow chip business, to make losses of around 4 trillion won ($2.96 billion) in the third quarter, lower than the 4.35 trillion won of the second quarter, reports Yonhap news agency.

He said Samsung has raised its production cut since the second half to 30 percent for DRAM and 40 percent for NAND Flash, from 20 percent and 30 percent, respectively, in the first half. Samsung's DS division logged an operating loss of 4.6 trillion won in the first quarter, its first financial loss in 14 years, as chip inventories grew significantly amid tapering global demand.