Due to the reduction in demand for smartphones and PCs, Samsung profits fall to an 8-year low.

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Slumping demand for smartphones and PCs has pushed Samsung’s profits to their lowest level in eight years.

As fewer and fewer people buy smartphones and laptops, Samsung’s quarterly sales have plunged to their lowest level in eight years.

In the three months to December, the IT giant’s operating profit was 4.3 trillion South Korean won ($3.5 billion), down 69% from the same period last year. Earnings fell 8% to nearly 70.5 trillion won ($57.3 billion), according to a statement.

It hasn’t seen a slump in quarterly earnings since the third quarter of 2014, when the company’s smartphone business fell sharply to its competitors. “The business environment deteriorated significantly in the fourth quarter due to weak demand due to the global economic slowdown,” Samsung said.

Disastrous results were expected. Samsung (SSNLF) cited disappointing results in its preliminary earnings forecast earlier this month. Analysts pointed to lower prices for memory chips and lower orders for home appliances.

In a presentation to investors, the company acknowledged that “demand for mobile devices and PCs remains weak” and that “customers continue to manage inventories despite growing concerns”. chip business.

Due to the unpredictability of the global economy, Samsung expects some of these issues to persist in the coming months, but overall demand should begin to improve in the second half of this year. The smartphone market is expected to decline further this quarter compared to the same period last year due to the “slowdown in major economies”.

On Tuesday, Samsung shares rose 3.5% in Seoul.

There were some encouraging signs. Samsung reported record sales of KRW 302.2 trillion (US$245.7 billion) in 2022, up from KRW 279.6 trillion (US$227.4 billion) in 2021.

However, analysts said they expect the company’s profitability to shrink again this quarter due to continued declines in memory chip prices.