Seoul: Samsung Electronics on Friday said it has cut memory production in the short term, as its quarterly profit plunged significantly (likely 96 per cent) amid the chip downturn, in a sharp departure from its previous position that it would not artificially reduce output.
The world's largest memory chip and smartphone maker earlier in the day estimated its January-March operating profit at 600 billion won ($454.9 million), sharply down from 14.12 trillion won a year ago. Samsung blamed sluggish demand for tech devices, coupled with customers' inventory adjustment, for the poor performance, reports Yonhap news agency.
"We are adjusting memory output to a meaningful level for products that we have secured enough inventory to deal with future demand," the company said in a regulatory filing, in an apparent effort to deal with falling prices and a supply glut. It did not elaborate on what a meaningful level means.
"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 first-quarter sales likely fell 19 per cent to 63 trillion won from 77.78 trillion won from a year earlier. The data for net profit was not available.
