Samsung unveils plans to cut computer chip production after first-quarter profits fall to 14-year low
Samsung has revealed plans to cut computer chip production after first-quarter profits fell to a 14-year low.
The rare move by the world’s largest chipmaker comes amid a global downturn in demand for semiconductors, which are used in everything from cars to cell phones.
Tough times: Semiconductors are used in everything from cars to mobile phones
In an update, the South Korean electronics maker reported that profits fell by about 96 percent to £362 million, beating analysts’ expectations.
Samsung’s memory chip division is estimated to have lost around £2.4 billion.
But the group’s decision to scale back chip production is expected to provide a boost to the wider industry, which has been dealing with an excess of share price strangulation.
Analysts now expect the market to recover in the third or fourth quarter of this year.
Samsung said that while it had cut production in the short term, it would continue to invest in infrastructure as it expected “solid demand for the medium to long term.”
Competitors, such as SK Hynix and Micron Technology, have already been forced to cut production.