Samsung Electronics' operating profit plummeted in the fourth quarter of 2022 due to weak demand for smartphones and semiconductors caused by the global economic slowdown.

The company reported an operating profit of 4.3 trillion won ($3.5 billion), a 69% decrease from the same quarter the previous year and the worst result since the third quarter of 2014. Revenue was 70.5 trillion won, down 8%.

The poor performance by the world's largest maker of memory chips and smartphones was reflected in the South Korean economy which contracted 0.4% in the fourth quarter, largely due to low shipments of semiconductors. Investors responded by selling Samsung shares, with the company's stock price closing 3.6% lower.

The chip unit was the hardest hit in the fourth quarter with its operating profit sinking 96.9% to 270 billion won. The company's mobile and network business also saw a 36.1% decrease in operating profit to 1.7 trillion won.

Despite the bleak outlook for the chip industry, Samsung plans to continue with its spending plans and purchase new equipment, primarily for cutting-edge chips. Samsung sees demand for memory chips recovering in the second half of the year, driven by the HPC and auto sectors.