Samsung unveiled plans to slash computer chip production after its first-quarter profits plunged to their lowest in 14 years.
The rare move from the world’s largest chipmaker comes amid a global downturn in demand for semiconductors, which are used in everything from cars to mobile phones.
Hard times: Semiconductors are used in everything from cars to mobile phones
In an update, the South Korean electronics maker flagged that profits had plummeted around 96 per cent to £362m, missing analysts’ expectations.
Samsung’s memory chip division is estimated to have lost around £2.4billion.
But the group’s decision to scale back chip production is expected to provide a boost for the wider sector, which has seen an excess of stock strangle prices.
Analysts now reckon the market will be able to recover in the third or fourth quarter of this year.
Samsung said that while it had cut ‘short-term’ output, it would continue to invest in infrastructure as it projected ‘solid demand for the mid-to-long term’.
Competitors, such as SK Hynix and Micron Technology, have already been forced to reduce production.
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