South Korean tech giant Samsung has released its Q1 report, which wasn’t exactly what investors were hoping for. The company reported revenue of $47.6bn – marking an 18% decrease YoY. The real kicker however came in the form of its operating profit – reported as $478m. A year prior, the company had reported profits of $10.5bn, which means this represents a staggering 95% decrease in profits YoY. It’s the lowest level Samsung’s profits have been in over 14 years.

If there was any good news for Samsung, it was the launch of its S23 range of smartphones this quarter – which had a positive effect on sales for its mobile phone segment. Analysts had said that global smartphone shipments had declined 13% YoY, and Samsung regained its spot this quarter as the top smartphone maker by shipments. The company’s mobile phone segment reported 22% growth from the previous quarter.

What’s causing the drop?

The main cause for Samsung’s lackluster report was falling chip demand. Samsung generates the majority of its profits from the sale of its microchips, but as demand fell alongside falling PC demand post-covid – Samsung has been forced to implement price cuts. Consumers have also been scaling back spending on tech due to rapidly rising inflation.

The tech giant has also announced that it expects to make significant reductions to its microchip production. Although the company did predict a recovery of the market around the second half of the year, which could spell good news for the company’s profits. If Samsung can effectively move its bloated chip inventory, the worst of the year might be behind it.

(About Samsung)

Samsung is a South Korean multinational conglomerate that was founded in 1938. The company is involved in a wide range of businesses, including electronics, construction, financial services, and biopharmaceuticals. Samsung Electronics is the largest subsidiary of Samsung and is a leading manufacturer of a wide range of consumer electronics and IT products, such as smartphones, TVs, refrigerators, and semiconductors. Over the years, Samsung has become one of the world’s largest and most successful technology companies, with a strong global presence and a reputation for innovation and quality. The company invests heavily in research and development, and has been responsible for many industry-leading advancements, such as the development of OLED displays and the introduction of the first smartphone with a curved screen.