January 9, 2023: -On Friday, Samsung Electronics withered that its quarterly profit tumbled by two-thirds to an eight-year less as a weakening global thrift has damaged the memory chip prices and curbed demand for electronic devices.

The down gain estimate by the enormous memory chip in the world, smartphone and TV makers, a bellwether for global consumer demand, sets a weak tone for different technology companies’ quarterly results.

Analysts said that Samsung’s profits are expected to shrink again in the current quarter after the South Korean firm announced its October-December operating profit likely decreased by 69% to 4.3 trillion won from 13.87 trillion won a year.

It was Samsung’s most minor quarterly profit since the third quarter of 2014 and decreased short of a 5.9 trillion won Refinitiv SmartEstimate, weighted toward forecasts from more consistently accurate analysts.

“All of Samsung’s firms had a hard time, but chips and mobile especially,” stated Lee Min-hee, an analyst at BNK Investment & Securities.

In a preliminary earnings statement, Samsung stated that quarterly revenue likely decreased by 9% from the same period to 70 trillion won. Asia’s fourth-biggest listed firm by market value will release detailed revenues on January 31.

Increasing global interest rates and cost of living have dampened demand for smartphones, devices that Samsung makes, and the semiconductors it supplies to rivals like Apple.

“For the memory industry, the decline in fourth-quarter demand was greater than anticipated as customers adjusted inventories in their effort to tighten finances further,” Samsung said in the statement.

 Samsung added that its mobile business’ profit in the fourth quarter as smartphone sales and earnings decreased because of weak demand resulting from prolonged macroeconomic issues.

“Memory chip prices decreased in the mid-20% during the quarter, and high-end phones like foldable didn’t sell as well,” said BNK Investment’s Lee, which added its display business was hurt due to client Apple’s production delays at the world’s most giant iPhone factory in China in the quarter.

Three analysts stated they anticipated Samsung’s profits to dive again in the present quarter, with a likely operating loss for the chips firms as a glut drives further decreases in memory chip prices.

Samsung shares are shutting down 1.4% higher on Friday versus a 1.1% rise in the broader market. Shares of rival memory chip creator SK Hynix rose 2.1%.