(Seoul) Samsung Electronics on Tuesday announced that its earnings at 4e quarter plunged nearly 70%, their biggest quarterly decline in more than eight years, as the global economic slowdown dealt a blow to chip and electronics sales.
The South Korean tech giant reported that its operating profits for the October-December period fell by 4.3 trillion won (3.22 billion euros), a drop of 69% compared to the previous year.
The drop matches the estimate released by Samsung earlier this month and is the worst drop in quarterly earnings since March 3.e quarter of 2014.
“The business environment deteriorated significantly in the fourth quarter due to weak demand amid a global economic downturn,” Samsung said in a statement.
Sales fell 8% from the same period in 2022, to 70.46 trillion won (52.74 billion euros).
Global revenue from the sale of memory chips fell 10% last year as electronics manufacturers “began to deplete inventories […] held” in anticipation of stronger demand, according to technology research firm Gartner.
“Consumers also started to cut spending,” leading to a drop in demand for PC computers and smart phones, “then businesses started to cut spending in anticipation of a global recession, which had a impact on overall semiconductor growth,” said Gartner analyst Andrew Norwood.
The company is the flagship subsidiary of giant Samsung Group, by far the largest of the family-owned conglomerates that dominate business in Asia’s fourth-largest economy.