Samsung Electronics has announced it will reduce its chip production as profits fall due to lower demand and increased competition in the semiconductor industry. The South Korean tech giant reported a worse-than-anticipated 96% decrease in its profits for the first quarter from memory chip production.

The company's profits have been affected by factors including the US-China trade war, global supply chain disruptions, and a shift toward cheaper chip alternatives. The decline in demand can also be attributed to the global economic slowdown and reduced purchases of chips by companies as they exhaust their stockpiles.

Samsung's move to reduce production is part of a wider trend in the industry, as chipmakers face increased pressure to balance supply and demand. Many firms have recently invested heavily in new chip fabrication facilities, leading to an oversupply of chips and a fall in prices. Samsung is one of the largest chipmakers in the world and has been a major supplier for companies such as Apple, but it now faces increasing competition from Chinese rivals such as Huawei and Xiaomi.