Samsung Electronics has forecast a sharp 56% drop in second-quarter operating profit, attributing the decline to sluggish AI chip sales and tightening U.S. export restrictions to China.
The tech giant expects operating profit to fall to 4.6 trillion won ($3.3 billion), marking its weakest performance in six quarters and raising concerns about its competitiveness in the fast-growing AI semiconductor sector. Delayed shipments of high bandwidth memory (HBM) chips to Nvidia, a key client, and new U.S. export rules disrupting business in China have significantly impacted earnings. Meanwhile, domestic rival SK Hynix has surged ahead, securing major AI chip supply deals.
Despite the challenging outlook, Samsung has announced a 3.9 trillion won ($2.8 billion) share buyback, signalling confidence in its long-term growth. The company also anticipates a rebound later in the year, driven by new smartphone launches and broader HBM chip sales. Full Q2 earnings are expected later this month, providing more insight into Samsung’s strategy amid rising global tech tensions and shifting chip market dynamics.
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