Samsung profits slump as US chip ban hits AI exports
Weak foundry sales and AI export restrictions drag Samsung’s second-quarter earnings well below analyst expectations.
Samsung Electronics expects its second-quarter operating profits to exceed half, citing Washington’s export controls on advanced AI chips to China.
The company announced a projected 56% year-on-year drop in operating profit, falling to 4.6 trillion won ($3.3 billion), with revenue down 6.5% from the previous quarter.
The semiconductor division, a core part of Samsung’s business, suffered due to reduced utilisation and inventory value adjustments.
US restrictions have made it difficult for South Korea’s largest conglomerate to ship high-end chips to China, forcing some of its production lines to run below capacity.
Despite weak performance in the foundry sector, the memory business remained relatively stable. Analysts pointed to weaker-than-expected sales of HBM chips used for AI and a drop in NAND storage prices, while a declining won-dollar exchange rate further pressured earnings.
Looking ahead, Samsung expects a modest recovery as demand for memory chips, mainly from AI-driven data centres, improves in the year’s second half.
The company is also facing political pressure from Washington, with threats of new tariffs prompting talks between Seoul and the US administration.
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