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RamiK [soylentnews.org] writes:

Bloomberg reports: [bloomberg.com]

Samsung Electronics Co. said it’s cutting memory chip production after reporting its slimmest profit since the 2009 financial crisis, a significant step toward ending a supply glut that had cratered prices across the industry.
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Operating profit at the world’s largest maker of memory chips plunged more than 95% to 600 billion won ($450 million) for the three months ended March, missing the average analyst estimate of 1.4 trillion won. Sales fell 19% to 63 trillion won.
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South Korea’s largest company had resisted pulling back despite the downturn, in part to grab market share from rivals SK Hynix Inc. and Micron Technology Inc., which have been forced to cut output.
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Samsung’s shares rose as much as 4.7% in the highest intraday jump in three months. Hynix shares surged as much as 6.7%.
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The company had warned that earnings would fall in the first quarter on slowing sales. But memory prices tumbled more than anticipated because of sluggish demand for a wide range of electronics from smartphones to PCs, as consumers and companies navigated recession risks. Despite its post-Covid re-opening, China’s market has also not bounced back as quickly as some anticipated.
Samsung is estimated to have lost about $3 billion in its memory chip division.
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Prices of DRAM - a type of memory used to process data - are expected to fall in the current quarter by around 10%, according to Yuanta’s Baik. That follows a roughly 20% slide in the previous three months and a more than 30% drop in the fourth quarter of last year.
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Inventory at Samsung had swelled to 52.2 trillion won at the end of last year after the company maintained production despite a collapse in demand.
The existing high inventory will take time to digest, said TrendForce Senior Vice President Avril Wu. “Slower-than-expected demand in the second half of 2023 will prolong the time required for inventory to get back to normal levels.”

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