Samsung Electronics is cutting back on chip production after reporting a 96% plunge in its quarterly operating profits.
In preliminary earnings, Samsung estimated that Q1 profit fell from $10.7B last year to $455.5M this year — the lowest in 14 years.
- The
South Korean giant said macroeconomic conditions and an oversupply and
slowdown in customer demand caused sales of its memory chips to drop
"sharply."
- The company is now optimizing its line operations and lowering chip production by "a meaningful level."
- Samsung
specializes in flash memory chips used in mobile chips, laptops, and
smartwatches. The oversupply signals that people are purchasing fewer of
the devices following the pandemic-led tech boom.
- Meanwhile,
Samsung's mobile business is anticipated to be a bright spot in its Q1
results thanks to the release of its Galaxy S23 phone lineup in February.
- The company's final earnings report is due out late this month.
