Samsung Electronics is having another bad quarter according to the company’s own preliminary estimates. This time, it’s warning that quarterly operating profit decreased 96 per cent compared to the same period last year, worse than the two-thirds plunge it suffered the three months prior. Not even robust sales of the new Galaxy S23 series could overcome a global plummet in chip demand.

Semiconductor demand has waned since peak covid as everyone splurged on lockdown toys and tools. Now the global economic slowdown has caused consumers to think twice about buying that next gadget resulting in swollen chip inventories for companies like Samsung. And according to my ECON101 professor, prices will fall when there’s more supply than demand putting the hurt on corporate profits. And you can’t get a pardon for that.

But don’t feel too badly for Samsung. It still made a ton of money. Operating profit is estimated at 600 billion won (about $456 million) — the lowest it’s been in 14 years, reports the Financial Times. It’s just not the staggering 14.12 trillion Korean won (about $10.7 billion) raked in last year at this time.

As a result, Samsung says it’s cutting memory chip production to a “meaningful level” to address the oversupply. “We have cut short-term production plans, but as we project solid demand for the mid-to-long term, we will continue to invest in infrastructure to secure essential cleanrooms and to expand R&D investment to solidify tech leadership,” Samsung said in a statement.

One bright spot for the quarter was the new Galaxy S23 series, with sales of about 11 million units. That’s up by 50 percent compared to its predecessor, according to Hanwha Investment & Securities analyst Kim Kwangjin as reported by Bloomberg.

Samsung will issue its final financial statement in a few weeks, but it typically diverges very little, if at all, from preliminary guidance.