Samsung warned the world earlier this month that its Q1 2023 earnings report was going to be bad. Now the report is here, and oh boy, is it a disaster. Profits are officially down a stunning 95 percent for Q1 2023. The company made 14.12 trillion Korean won in profit ($10.7 billion) for Q1 2022, and this year it's just 640 billion won ($478.55 million). These are Samsung's lowest profits since 2009, basically back when the modern smartphone market was still materializing.

Samsung is well-known for its smartphones, TVs, and appliances, but most of the company's business is components like chips and displays. In 2022 the memory division accounted for 55 percent of profits, mobile was 22 percent, and displays were 11 percent. That company-leading memory division is exactly what tanked this quarter, posting a loss of 4.58 trillion Korean won ($3.4 billion), compared to a profit of 8.45 trillion won ($6.3 billion) this quarter last year.

Back when memory sales were booming at the height of the pandemic, Samsung chose to stockpile chips to fend off a possible shortage. Now sales are down, and while some memory vendors saw this coming and cut production, Samsung didn't, and now it's facing a glut of unsold chips and lower prices. Samsung announced it would finally cut production at the beginning of April, when it set off alarm bells about this earnings report.

Samsung expects to recover in the second half of the year, thanks to these production cuts. It expects demand will "gradually recover" due to "the launch of new smartphones and PC promotion." That means the company still needs to survive Q2, though.