Samsung Electronics closes with a 4.3% rise in stock price... Impact of 'Production Cut Formalization'

On the 7th, Samsung Electronics officially announced its first semiconductor production cut despite a first-quarter 'earnings shock' (performance decline), leading its stock price to close more than 4% higher.

Samsung Electronics closed trading at 65,000 won, up 4.33% from the previous day. Foreign investors drove the stock price up by net buying 881.2 billion won worth of Samsung Electronics shares, while institutions also net bought 114.8 billion won. In contrast, individual investors net sold 984.6 billion won worth of shares.

[Image source=Yonhap News]

Before the market opened, Samsung Electronics disclosed that its consolidated operating profit for the first quarter of this year was preliminarily estimated at 600 billion won, down 95.75% compared to the same period last year, and sales decreased by 19% to 63 trillion won. The operating profit was more than 16% below the market forecast of 720 billion won, marking an earnings shock level.

However, when announcing the results, Samsung Electronics stated that it is "meaningfully adjusting memory production downward," effectively acknowledging production cuts for the first time. Until now, it had rejected market demands for semiconductor production cuts by saying there were "no artificial production cuts," but this is the first time it has formalized this stance.

The market's expectations have grown that the memory semiconductor market conditions will improve as Samsung Electronics moves forward with production cuts, outweighing the first-quarter shock.

Consequently, expectations that competitor SK Hynix will also benefit have increased, and SK Hynix's stock price showed a sharp rise. SK Hynix closed at 89,100 won, up 6.32% from the previous day.

This content was produced with the assistance of AI translation services.