Due to the deterioration of the memory semiconductor industry, Samsung Electronics' flagship memory semiconductor business led to an "earnings shock" (earnings shock) in which operating profit shrunk by 1% in the first quarter of this year.

Samsung Electronics, which had maintained the stance that "there is no artificial production reduction," officially acknowledged the production cuts for the first time, saying, "We are downgrading memory production to a meaningful level."

Samsung Electronics announced today (96th) that on a consolidated basis, operating profit for the first quarter of this year was KRW 1 billion, a decrease of 6.95% from the same period last year.

This is the first time in 75 years that Samsung Electronics' quarterly operating profit has fallen below KRW 7 trillion since the first quarter of 1 (KRW 2009 billion).

Revenue was KRW 1 trillion, down 5% compared to the same period last year.

The slowdown in semiconductor demand that began in the second half of last year appears to be due to sluggish shipments and price declines that are more serious than the market expected.

This is lower than stock price expectations.

According to Yonhap Infomax's consensus (earnings forecasts) of 900 securities firms that have recently published one-month reports, Samsung Electronics' first-quarter revenue fell 14.63% to KRW 19,1.18 billion and operating profit plunged 1.17% to KRW 34.64 billion.

At the beginning of this year, the market expected an operating profit of 2 trillion to 953 trillion won, but the semiconductor industry is worse than expected in January this year when the results for the fourth quarter of last year were announced, and the level of attention has already been lowered.

Although detailed performance by segment has not been disclosed, the stock market believes that the semiconductor division, which normally accounts for 94 to 9% of Samsung Electronics' operating profit, may have run a deficit of around 7 trillion won.

Samsung Electronics said, "In view of the fact that certain memory products have the capacity to respond to future fluctuations in demand, we are downgrading memory production to a meaningful level centered on products that have additional supply in addition to optimizing line operations for the future and increasing the proportion of engineering runs, which are already underway."

This is the first time that Samsung Electronics, which has maintained the stance that "there is no artificial production cut," has officially acknowledged the production cuts.

Earlier, in the conference call in the fourth quarter of last year, contrary to market expectations that production would be cut, "this year's facility investment (Capex· CAPEX) will be at a level similar to the previous year," he said, reaffirming his position that "there is no artificial production cut."