Earnings Report Reveals Samsung Lost $270 Million Due To Plant Shut Down

Earnings Report Reveals Samsung Lost $270 Million Due To Plant Shut Down

Samsung lost around $270 million as a result of the shutting down of its semiconductor plant in Austin, Texas, according to Yonhap News. Despite this, Samsung’s latest earnings release reports strong sales of its smartphones and other consumer electronics.

 

During a conference call, Han Seung-hoon, a senior vice president at Samsung’s foundry business, said that the shutdown affected around 71,000 wafers, corresponding to “around 300 to 400 billion won in damage”.

 

Samsung had to shut down its Austin plant in February 2021 after a storm left about 200,000 Austin homes without electricity. The plant produces microprocessors like radio frequency integrated circuits and solid-state drive controllers — The shutdown lasted an entire month. This is the longest Samsung has ever had to halt production at a factory.

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The South Korean Electronics giant says that the plant was back up to 90 percent production at the end of March 2021. At the moment, it is now back up to normal levels.

 

The closure of the plant coincided with a global chip shortage affecting everything electronic from graphics cards to cars. Samsung also says the supply issues have contributed to a drop in sales for mobile displays in the first quarter.

 

It says there’s a possibility that supply issues will continue into the second half of the year, but that it’s “strengthening cooperation with the in-house foundry and expanding the use of outsourced foundries” to compensate.

 

Samsung’s profits exceeded expectations according to The Financial Times. Its net profit for the quarter was up 46 percent to around $6.4 billion compared to the same quarter the previous year. This its highest first-quarter profit since 2018. A 66 percent surge in profits at its mobile division, is responsible for the increase according to CNBC. Samsung says that sales of its “well-received” flagship Galaxy S21 series have increased alongside its mid-range models.

 

 

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Kolawole Awolope

Passionate about talking, passionate about talking tech.

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