Samsung Electronics announced output cuts for its computer memory chips on Friday, likely in an effort to reduce inventories ahead of another quarter of slow profit.
The South Korean tech giant said in a regulatory filing that it has been cutting output of key memory products by “meaningful levels,” but that it still has enough of the chips in stock to satisfy swings in demand.
Operating profit for the three months ending in March was expected to be 600 billion won ($455 million) for Samsung, down 96% from the same period a year ago. It predicted a 19% decline in sales to 63 trillion won ($47.7 billion) for the quarter.
Samsung reported that the sluggish global economy and customers’ decision to halt purchases in order to focus on depleting inventory had led to a significant decline in demand for memory.
Profit for Samsung’s October-December quarter dropped by about 70%, reflecting the impact of global events such as Russia’s war in Ukraine and high inflation on the global technology industry.
