Samsung announces its astonishing 95% earnings decline for the first quarter of 2023.

The world was forewarned by Samsung earlier this month that its Q1 2023 earnings announcement would not be good. Oh wow, the report is a disaster now that it is actually here. Earnings for the first quarter of 2023 are officially down a startling 95%. In Q1 2022, the corporation earned 14.12 trillion Korean won ($10.7 billion), compared to merely 640 billion won ($478.55 million) this year. These are Samsung’s lowest profits since 2009, essentially when the market for contemporary smartphones was still developing.

Although Samsung is well-known for its smartphones, TVs, and other electronics, the majority of the company’s sales are made up of processors and screens. 55 percent of profits in 2022 came from the memory business, 22 percent from mobile, and 11 percent from displays. A loss of 4.58 trillion Korean won ($3.4 billion) was reported this quarter, compared to a profit of 8.45 trillion won ($6.3 billion) in the same period last year, by the company’s market-leading memory segment.

In order to prepare for a potential shortage, Samsung decided to store chips when memory sales were surging at the height of the pandemic. Sales have since decreased, and while some memory providers anticipated this and reduced output, Samsung chose not to do so, leaving it with an excess of unsold chips and lower prices. At the start of April, Samsung made the decision to finally reduce production, which raised concerns about this earnings release.

With the help of these production reductions, Samsung anticipates a turnaround in the second part of the year. Likewise, it anticipates that demand would “gradually revive” as a result of “the introduction of new smartphones and PC promotion.” That implies that the business must still survive Q2.