Samsung Electronics, one of the world's leading memory chip makers, is reportedly making plans to cut back memory chip production as it expects to experience its worst profit slump since 2009 in Q1 2023, according to a report by TechCrunch.

The South Korean tech giant is projecting 600 billion won ($450 million) in quarterly profit from January to March 2023, a 95.8% drop from 14.12 trillion won in Q1 2022, and far below analysts' estimates of 1.4 trillion won in the quarter.

According to the company's preliminary earnings release on Friday, “it is adjusting to lower its memory production to a meaningful level” to optimize its manufacturing operations.

This is amid the global macroeconomic slowdown, memory chip oversupply and depressed consumer spending on technology products that have hurt its profit, the company added.

Samsung had earlier this year said that it would not slash its memory chip investment despite dwindling demand, hoping for a recovery of the memory chip market in the second quarter of this year, however, the unanticipated memory chip industry crunch might be making the tech giant review its commitments.

The broader industry trend has also seen its peers, such as Micron Technology, Kioxia, and SK Hynix, cut their memory chip production to counter oversupply.