Samsung Reports a 95% Drop in Profits, Worst Quarterly Earnings in 14 years

Mumbai (India), 27th April 2023: As a result of declining consumer electronics spending and a global microchip glut that affected its core memory business, Samsung Electronics on Thursday announced its weakest quarterly profits in 14 years.

The South Korean business, which is among the biggest producers of memory chips and cellphones worldwide, reported operational profit decreased by 640 billion won ($478.6 million), or 95%, from the previous year.

Sales decreased by 18% to 63.75 trillion won in the first quarter, and the company’s net income plunged 86.1 percent to 1.57 trillion won.

The company said, “overall consumer spending slowed amid the uncertain global macroeconomic environment.”

Along with this the company also put blame on the extremely low demand of memory chips which contributes towards almost half of the company’s profits.

The chip division of Samsung announced losses of 4.58 trillion won, its first operating deficit since 2009, when the global financial crisis of 2008 was just beginning to fade.

The company further added, “continued price declines and an increased valuation loss … amid weakening sentiment and continued impacts of inventory adjustments by customers caused by prolonged external uncertainties…” has led to the current state of affairs.

However, despite the decline in the company’s profit Samsung has continued to make bold investments. In March, it announced plans to invest $227 billion over the next 20 years on the construction of the largest chip centre in the world in Yongin, south of Seoul.