Samsung Electronics will cut memory chip production after flagging a 96 per cent drop in profits for the March quarter – a 14-year low.
Samsung’s preliminary numbers show just A$682.23 million in operating profits for the quarter, down from A$15.9 billion for the same quarter in 2022.
This marks the first time since the first quarter of 2009 that the Korean company will deliver a quarterly operating income 1 trillion won. The company is drastically cutting back on memory chip production as the industry suffers from slowing demand.
“We are lowering the production of memory chips by a meaningful level, especially that of products with supply secured,” Samsung said.
This is expected to be a short term cut, in order to correct inventory levels.
Samsung last month announced a commitment to pour A$342 billion over twenty years into developing a mega semiconductor hub in South Korea.
Samsung’s shares jumped 4 per cent on news of the production slowdown, and many market analysts are seeing this as a sign that semiconductors levels will soon return to an acceptable level.
The company will release detailed earnings later in the month.
