South Korean tech giant operating profit estimated to plummet 96% in January-March
Samsung Electronics will cut memory chip production in the short term after estimating a 96% plunge in its quarterly profit amid the chip downturn.
The South Korean tech giant’s preliminary figures showed operating profit dove 600 billion won ($455 million) in January-March, from 14.12 trillion won a year earlier, the Yonhap News Agency reported on Friday.
The world’s largest chip producer said this stemmed from a slowdown in the global economy and lower demand for tech devices along with customers’ inventory adjustments.
“We are adjusting memory output to a meaningful level for products (so) that we have secured enough inventory to deal with future demand,”the tech giant said.
The company’s shares gained more than 4% after the news it would cut chip-making.
“While we have adjusted our short-term production plan, we will continue to invest in infrastructure to secure clean rooms and expand R&D expenditures to strengthen our technology leadership as we forecast solid demand in the medium and long term,” it said.
Samsung’s sales are projected to fall 19% year-on-year to 63 trillion won ($47.7 billion) in the first quarter of this year.