Highly unusual for Samsung to signal chip production cut
Samsung shares up 4.5, rival SK Hynix up 5.6
Q1 chip loss likely biggest since at least 2009analysts

SEOUL, April 7 Reuters Samsung Electronics Co Ltd said on Friday it would make a meaningful cut to chip production, following the lead of smaller rivals, as it grapples with a sharp global downturn in semiconductor demand that has sent prices plummeting.

The unusual output cut by the world39;s biggest memory chipmaker with no previous announcement recalled by Samsung officials and analysts came after it flagged a worsethanexpected 96 plunge in firstquarter profit.

Investors brushed off the profit miss, betting the move by the industry leader would support chip prices that had fallen by about 70 over the last nine months.

Samsung jumped 4.5 in early trading in the biggest oneday rise since September, while rival SK Hynix Inc39;s shares surged 5.6.

Smartphone and personal computer makers had stocked up on chips during the pandemic when demand for consumer devices surged, but they are now running down inventories as shoppers cut back on purchases amid rising inflation.

Samsung said memory demand had dropped sharply because of a weak global economy and customers slowing purchases as they focused on using up their stocks.

We are lowering the production of memory chips by a meaningful level, especially that of products with supply secured, it added, in a reference to those with sufficient inventories….