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Samsung loses over $270M from Texas plant shutdown as quarterly profits boom

Samsung loses over $270M from Texas plant shutdown as quarterly profits boom


The chip plant was forced to shut down for a month

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Illustration by Alex Castro / The Verge

Shutting down its semiconductor plant in Austin, Texas lost Samsung over 300 billion won (around $270 million), Yonhap News reports. Speaking during a conference call, a senior vice president at Samsung’s foundry business Han Seung-hoon said that the shutdown affected around 71,000 wafers, corresponding to “around 300 to 400 billion won in damage.” The statement coincided with Samsung’s latest earnings release, in which it reported strong sales of its smartphones and other consumer electronics. 

The South Korean electronics giant was forced to shut down its Austin plant — which produces microprocessors like radio frequency integrated circuits and solid state drive controllers — back in February after a storm left some 200,000 Austin homes without power. The shutdown lasted a month in total, the longest Samsung has ever had to halt production at a factory. However, the company says that the plant was back up to 90 percent production at the end of March, and is now back up to normal levels.

Around 71,000 wafers were affected by the Austin plant shutdown

Overall, however, The Financial Times reports that Samsung profits exceeded expectations. Net profit for the quarter was up 46 percent to 7.1 trillion won (around $6.4 billion) compared to the same quarter the previous year, resulting in its highest first quarter profit since 2018. The increase was driven by a 66 percent surge in profits at its mobile division, according to CNBC. Samsung says that sales of its “well received” flagship Galaxy S21 series have increased alongside its more price competitive midrange models.

Samsung’s own manufacturing issues have coincided with a global chip shortage that’s affected everything from graphics cards to cars and even toasters. Samsung says the supply issues have had knock-on effects on its business, contributing to a drop in sales for mobile displays in the first quarter. The company says it’s possible that supply issues will continue into the second half of the year (echoing similar predictions from TSMC and Intel), but that it’s “strengthening cooperation with the in-house foundry and expanding the use of outsourced foundries” to compensate.

Otherwise, Samsung thinks its business will benefit from economic recoveries and stimulus programs around the world. It expects strong demand for everything from servers, to storage, smartphones, and PCs in the second half of the year. However, it specifically says that demand for TVs could drop in the same period, as people start venturing outside.