Samsung reports $360 billion losses due to Texas plant shutdown

Samsung Electronics revealed on Thursday, April 29, that it lost a massive amount due to the temporary closure of its production plant in Austin, Texas. The South Korean company shared that its total losses incurred has reached ₩400 billion or $360 million,

What caused Samsung’s losses

As per The Korea Times, Samsung Electronics had to shut down its plant in the said state in the U.S. due to various reasons. Other than the global chip shortage, the firm was also forced to halt its production due to power outages and inclement weather conditions.

In February, a massive snowstorm hit Texas, and this led to power interruption, and water supply has been cut as well. The situation was so severe that the state government had to impose an order for chip makers to stop their operation and close their plants.

Samsung disclosed that it was only on March 31 when it was able to return to at least 90% of its production volume. This means that it took the company a month to get back its operation to run at its normal level.

"There were wafer production disruptions due to the stopping of the fab. About 71,000 wafers were affected, and this corresponds to around 300 to 400 billion won in damages," Han Seung Hoon, Samsung vice president, said via conference call during the company's Q1 earnings report.

Samsung takes preventive measures to avoid another massive loss

Now that Samsung saw the extent of damage that they can suffer from again if the same disaster happens once more in the future, the company said it has taken steps to prevent big losses. It said that it held talks with the local government and utility companies to make sure that power disruptions will never occur again.

It should be noted that the plant shutdowns in Texas have worsened the chip shortage problem in the world. Thus, the plants should be protected, and everyone can see now how huge it can affect businesses that use semiconductor parts.

"Due to the global semiconductor shortage, we are also experiencing some effects, especially around certain set products, and display production,” Ben Suh, Samsung Electronics South Korea executive vice president, added. “We are approaching this from multiple angles to minimize the impact."

Finally, Samsung is currently the no. 2 foundry company in the world, and it vowed to boost its technological leadership to maintain its position. The firm has also started to develop the 2nd generation 3-nanometer process to maintain its lead, The Korea Herald reported.