Samsung Electronics reported a 96% plunge in quarterly operating profit, prompting the company to make a "meaningful" cut to chip production.
The company estimated its operating profit fell to 600 billion won ($455.5 million) in January-March, from 14.12 trillion won a year earlier, the lowest profit for any quarter in 14 years.
The global semiconductor market has suffered a sharp downturn, leading to a drop in memory chip demand due to the macroeconomic situation and slowing customer purchasing sentiment.
Samsung plans to lower the production of memory chips by a meaningful level, especially those with supply secured, indicating an unusually strong signal for the company.
SK Hynix, Samsung's rival, saw its shares surge 5% as investors welcomed the plans to cut production to preserve pricing power.
The company did not disclose the size of the planned cut, but analysts estimated the chip division sustained quarterly losses of more than 4 trillion won ($3.03 billion).
The chip division's quarterly loss would be the first since the first quarter of 2009, which is a major divergence from what is normally a cash cow that generates about half of Samsung's profits in better years.
The drop in consumer demand for tech devices due to rising inflation has led to semiconductor buyers, including data center operators and smartphone and personal computer makers.
Samsung's revenue likely fell 19% from the same period a year earlier to 63 trillion won.
The company is due to release detailed earnings, including divisional breakdowns, later this month.