Samsung Warns of Sharp Q2 Profit Drop Amid US AI Chip Curbs on China
- tech360.tv
- Jul 8
- 2 min read
Samsung Electronics projected a 56% fall in second-quarter operating profit, citing US restrictions on advanced artificial intelligence chip exports to China and delays in shipments to key customers.
The South Korean tech giant estimated an operating profit of 4.6 trillion won (SGD 4.3 billion) for the April to June period, significantly below the 6.2 trillion won forecast by analysts.
This marks Samsung’s weakest quarterly profit in six quarters, down from 10.4 trillion won a year earlier and 6.7 trillion won in the previous quarter.
Revenue is expected to dip 0.1% year-on-year to 74 trillion won, according to the company’s filing.
Samsung attributed the decline to inventory value adjustments and the impact of US export controls on advanced AI chips destined for China.
The company’s Device Solutions (DS) Division, which includes its memory chip business, saw a quarter-on-quarter profit decline.
Samsung also reported a drop in earnings from its foundry business, citing low utilisation rates and sales restrictions tied to US export controls.
The company said its improved high-bandwidth memory (HBM) products are undergoing customer evaluation and shipments are ongoing.
Analysts noted that delays in supplying chips to major US customer Nvidia also contributed to the earnings slump.
Greg Roh, head of research at Hyundai Motor Securities, said the worse-than-expected profit would negatively affect investor sentiment, though he expects a gradual recovery in the third quarter.
Samsung anticipates narrowing the operating loss in its foundry business in the second half of the year as demand recovers and utilisation improves.
Detailed earnings results, including a breakdown by business unit, are expected in late July.
Samsung forecasts 56% drop in Q2 operating profit
US AI chip export curbs to China cited as key factor
Estimated profit of 4.6 trillion won, lowest in six quarters
Source: REUTERS
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