Samsung the Unworried

Hey all, this is Vlad in Hong Kong. Samsung’s pulling a power move likely to singe the brows off its already suffering rivals. But first...T [View in browser]( [Bloomberg]( Hey all, this is Vlad in Hong Kong. Samsung’s pulling a power move likely to singe the brows off its already suffering rivals. But first... Today's must-reads: - Sony’s [making fewer]( PlayStation VR2 headsets after weak pre-orders - Xiaomi’s longtime India chief is [departing]( the company - Smartphone market will [keep shrinking]( in 2023, according to Samsung Holding nothing back If there was one theme ahead of Samsung Electronics Co.’s earnings today, it was a shared expectation that the world’s biggest memory maker would follow its smaller rivals in restraining production — for instance, by cutting spending on expansion. So of course Samsung [did no such thing](. When asked about its memory supply plans, the company said it’s investing for the mid to long term and will be keeping its 2023 capex similar to 2022’s lavish spend. It has no plans to reduce memory production even while prices plummet. South Korea’s biggest company, the maker of smartphones, displays, fridges and ovens, just declared it was ready to stomach the pain of the memory downcycle and good luck to anyone trying to match it. It’s a surprisingly uncollegiate move for an industry that seemed to have put down the weapons of past price wars. Memory makers were supposed to have sobered up and realized that overheated competition benefits no one in the long run. But Samsung is different in its overwhelming hugeness, and you might say its scale helped dictate its decision. Not just scale, the company’s got various other businesses that benefit from a steady chips supply, including its displays and TVs, all the smart home appliances and the Galaxy lineup of consumer gadgets. Samsung didn’t make this argument during its earnings call, but there’s reason to believe the company will save itself unforeseen trouble and headaches by just pushing ahead like it’s doing and accepting that it’ll come at a cost. After all, the entire memory industry is dealing with the effects of [over-expanding]( during the high-demand times of the pandemic, so maybe it’s wise now not cut back too far during the doldrums. Still, Samsung’s decision will inevitably be most harmful to its smaller, less diversified rivals. SK Hynix Inc. in Korea, Micron Technology Inc. in the US and Kioxia Holdings Corp. in Japan have all slammed the brakes on expansion. They face the same cratering of demand that Samsung’s grappling with, but they’re in a whole different weight class. It’s akin to the effects of alcohol or caffeine: the same dose impacts different-sized people differently. Samsung may get woozy or jittery, but it will be fine. Everyone else might want to start thinking about sharing the pain. Kioxia is already talking to Western Digital Corp. about a merger and Samsung’s shrug about cutbacks may add some impetus to industry consolidation. Hopes for a quick rebound in one of the tech industry’s most volatile segments all hinged on Samsung’s participation in limiting supply. But hey, there’s a silver lining to this business crisis: 2023 is now shaping up to be a good year to buy more memory or storage for your home PC. Prices aren’t going up anytime soon. —[Vlad Savov](mailto:TK@bloomberg.net) The big story Not long ago, Huawei declared business was back to normal, but now the Biden administration is considering [completely cutting off]( the Chinese networking heavyweight from access to US technology. Get fully charged The European Union is [considering a proposal]( that would require big data-users like Netflix and Google to help pay for telecom upgrades. The CEO of Italian cable giant Prysmian [likely won't seek a new term](, even though he just pushed the company past €10 billion in market value. Buyout firm Convergence Partners has [raised nearly $300 million]( to buy African technology assets, bringing the total funds under its management to about $600 million. A Huawei spinoff is [the only major phone manufacturer]( to see growth in China shipments last year in an otherwise dismal year for sales. Follow Us SssMore from Bloomberg Get Bloomberg Tech weeklies in your inbox: - [Power On]( for Apple scoops, consumer tech news and more, every Sunday - [Game On]( for reporting on the video game business, delivered on Friday - [Cyber Bulletin]( for exclusive coverage on the shadow world of hackers and cyber-espionage, sent every Wednesday Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. You received this message because you are subscribed to Bloomberg's Bloomberg Tech Daily newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. [Unsubscribe]( [Bloomberg.com]( [Contact Us]( Bloomberg L.P. 731 Lexington Avenue, New York, NY 10022 [Ads Powered By Liveintent]( [Ad Choices](