South Korea’s chip maker SK Hynix and America’s Micron Technology have also reduced production.
A report released by Eugene Investment & Futures said Samsung’s “proactive” efforts to break out of its inventory rut were “evaluated positively” given its impact on market sentiment and demand for memory chips.
“Even if the pace of recovery for demand remains slow, if cooperation among chip makers recovers on production cuts, the semiconductor industry is likely to recover in the second half.”
While solid sales of its new flagship Galaxy 23 smartphone helped offset losses in the chip sector in the first quarter, analysts expect conditions to worsen in the April to July period and even the worst since 2008. Samsung’s first profit will be loss.
“We cannot rule out the possibility of Samsung turning red when the impact of new smartphones wears off,” Hwang Min-seong, an analyst at Samsung Securities, told Yonhap news agency.
The recent drop in profits hasn’t stopped Samsung from making bold investments—in March, it unveiled plans to contribute $227 billion over the next two decades to build the world’s largest chip center in Yongin, south of Seoul.