Samsung plans to decrease its chip production to cope with the economic decline.

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  • Samsung Electronics Co. Ltd. is planning to cut chip production by a “significant” amount, following a 96% decline in quarterly operating profit.
  • The company’s financial performance was worse than expected due to the worsening global semiconductor market.
  • As the world’s largest memory chip maker, this decision will have significant implications for Samsung and the industry as a whole.

Samsung has announced that it will be decreasing the number of chips it produces in order to cope with the economic downturn caused by the COVID-19 pandemic. The South Korean tech giant has been hit hard by the pandemic, with both demand for their products and production capacity being affected.

In response, Samsung will be cutting back on the production of memory chips and other semiconductor products. The reduction in production will reportedly be around 10%, and will begin in the second quarter of this year.

This move is part of a broader strategy aimed at mitigating the impact of the pandemic on the company’s business. Samsung has already made moves such as cutting executive salaries and suspending certain projects in order to save costs.

While the company has seen increased demand for home appliances and 5G network equipment, the overall economic environment has led to a decline in sales of smartphones and other electronic devices. In addition, supply chain disruptions and factory shutdowns have also impacted Samsung’s operations.

Despite the challenges faced by the company, Samsung remains optimistic that it can weather the storm. In a recent earnings call, the company’s CEO, Lee Jae-yong, stated that he believed that “the worst has passed” and that Samsung was “weathering the storm better than others”.

Nevertheless, with the pandemic still ongoing and the economic outlook uncertain, Samsung’s decision to cut back on chip production is a sign of the challenges facing one of the world’s largest tech companies.

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