samsung electronics has reported its worst quarterly profits in 14 years the south korean company said in a statement that operating profit fell to 640 billion won 4786 million down 95 percent from a year earlier samsung is one of the worlds largest makers of memory chips and smartphones its firstquarter net income fell 861 percent to 157 trillion won and sales dropped 18 percent to 6375 trillion won the firstquarter drop is the third consecutive margin squeeze for samsung which saw a 70 percent fall in operating profits in the fourth quarter onyear samsung electronics is the flagship subsidiary of the giant samsung group by far the largest of the familycontrolled conglomerates that dominate business in asias fourthlargest economywhats behind the deep plungethe company said that overall consumer spending slowed amid the uncertain global macroeconomic environment samsung also blamed weakening demand for memory chips which usually generate about half of its profits and falling chip prices the companys chip division reported 458 trillion won in losses its first operating loss since 2009 it said that this was due to continued price declines and an increased valuation loss amid weakening sentiment and continued impacts of inventory adjustments by customers caused by prolonged external uncertaintiesdemand for memory was expected to gradually recover in the second half of 2023 it added amid projections that customer inventory levels will have declinedsamsung mobile sales a bright spotsamsungs mobile business was a brighter spot reporting 394 trillion won profit in q1 up from 382 trillion won a year earlier good sales of samsungs new flagship galaxy 23 smartphones helped offset deficits in the chip sector in the first quarter however analysts expect conditions in the april to july period to worsen and even lead to samsungs first profit loss since 2008 cutting down productionsamsung is the worlds biggest memory chipmaker chipmakers led by samsung have been hit by a global economic slowdown that has dealt a blow to memory sales south korean chip maker sk hynix and micron technology of the united states too have also reduced production samsung said this month that it will scale back memory chip production to a meaningful level to address the oversupply this is a rare announcement from the company these companies enjoyed record profits in recent years as demand swelled during the pandemic consumers globally bought new computers and smartphones during lockdowns prompting chip makers to ramp up production however demand diminished as lockdowns lifted and weakened further in the face of soaring inflation and rising interest rateswith agency inputs