Post a CommentSamsung to up chip output to compensate for power outage losses
By Colleen Taylor, Contributing Editor -- Electronic News, 8/6/2007
Samsung Electronics Co. Ltd. has launched into overdrive in an attempt to minimize the fallout from a power outage that hit one of its chip production plants last week and forced the company to halt a total of six chip manufacturing lines.
The company said over the weekend that it had resumed operation at all of its previously closed chip lines in Giheung, South Korea by Saturday afternoon. Samsung also said that it anticipated its losses from the power outage to not exceed $43.36 million (40 billion Korean won.) Last week, the company estimated that its losses could be as high as $54.1 million (50 billion Korean won.)
At a press conference today in South Korea, Samsung executives reportedly said that, in spite of the power outage's effects, the company expects to meet its targets for production and quarterly earnings. "We plan to compensate for the production losses," Choi Chang-sik, a senior VP for Samsung, told reporters, according to an Associated Press report from Seoul.
Chang-sik reportedly declined to provide specific figures on the compensation efforts.
Analysts say that, even if Samsung manages to recover quickly, the shut-down's effects could still have an impact on the larger memory industry for weeks. "The affected lines represent about 35 percent of global NAND production; they account for 90 percent of Samsung's NAND production," Nam Hyung Kim, director and chief analyst of memory ICs and storage systems for market research firm iSuppli Corp., told Electronic News last week. "A NAND production shortage could now extend through the first half of August."
