The price of memory chips fell, and the profit of Samsung's electronic chip division dropped by more than 90%

With consumer spending on electronic products decreasing, the global demand for semiconductors has also dropped sharply. The fourth quarter results released by Samsung Electronics on Tuesday showed that the company's profits fell sharply in the current quarter.

Samsung Electronics is the world's largest manufacturer of memory chips. The company said that the profit of the chip division dropped by more than 90% to 270 billion won (US $220 million) in the fourth quarter of last year as customers continued to handle large inventories. The operating profit of the quarter was 4.3 trillion won, less than the average forecast of 5.8 trillion won by analysts. The net profit of the quarter was 23.5 trillion won, which was better than expected and benefited from the one-time impact of the local tax law adjustment. At the time of soaring interest rates and inflation, consumers reduced their purchases of electronic products, making the largest enterprise group in South Korea have to face the adverse situation of historical decline in the price of memory chips.

In its performance briefing, Samsung pointed out that in the short term, downstream customers still maintain the position of digesting inventory for storage chips, but the global investment in core infrastructure, such as servers used by AI, will remain relatively stable, and the global demand for chips related to mobile devices will recover from the second half of the year.

According to the report of the research institute, the revenue of Samsung Electronics semiconductor business last year was 65.585 billion US dollars, accounting for 10.9% of the global semiconductor revenue, and it is the only manufacturer with a share of more than 10%. In the second half of last year, Samsung Electronics was still the semiconductor manufacturer with the highest revenue in the whole year, although it was affected by the decline in the price and demand of memory chips and the revenue of their semiconductor business.