Samsung's quarterly profits fell to their lowest level in eight years as customers purchased fewer cell phones and laptop computers.
On Tuesday, the tech behemoth announced an operating profit of 4.3 trillion Korean won ($3.5 billion) for the three months that ended December, a 69% decrease from the past year. According to a statement, revenue declined 8% to slightly about 70.5 trillion won ($57.3 billion).
"The business environment deteriorated significantly in the fourth quarter due to weak demand amid a global economic slowdown," Samsung noted in the statement.
It was the company's lowest quarterly profit since the third quarter of 2014, when its smartphone unit fell behind competitors significantly.
The bleak outcomes were expected. Analysts cited lower memory chip prices and fewer orders of consumer devices as reasons for Samsung's poor performance in a pre-earnings estimate earlier this month.
The electronics giant revealed in an investor presentation that "mobile and PC demand was weak," and that its memory chip business had also suffered "as customers continued to adjust their inventories amid deepening uncertainties."
Due to global economic uncertainties, Samsung forecasts that some of these issues will persist in the next months, but that overall demand will begin to rebound in the second half of the year.
The demand for smartphones and other products made by Samsung as well as for the semiconductors it provides to rivals like Apple has been slowed by rising global interest rates and the cost of living.
"For the memory business, the decline in fourth-quarter demand was greater than expected as customers adjusted inventories in their effort to further tighten finances," Samsung said earlier this month.
Its mobile business profit fell in the fourth quarter as smartphone sales and revenue fell due to weak demand caused by extended macroeconomic challenges, according to Samsung.
Smartphone demand is expected to fall again this quarter compared to the same period last year, "due to the economic slowdown in major regions," according to the report.
On Tuesday, Samsung's shares dropped 3% in South Korea.
In October, Samsung stated that it didn't anticipate many changes to planned 2023 investments. According to analysts, Samsung has a history of not publicly reporting reductions in memory chip manufacturing, but it may naturally adjust investment by delaying the influx of equipment or in other ways.
However, analysts have stated that they anticipate a further decline in the company's profitability this quarter as a result of falling memory chip prices.