·SamsungSamsung jects a 56% plunge in operating fit, blaming U.
Chip controls on ChinaBY AFPBY AFPSamsung's key semiconductors division "recorded a quarter-on-quarter decline in fit due to inventory value adjustments and the impact of U.
Restrictions on advanced AI chips for China", it said.
Jung Yeon-Je—AFP via Getty ImagesSamsung Electronics said Tuesday it expected its second quarter operating fits to fall by more than half, blaming U. Export controls on advanced AI chips to China.
The firm is the flagship subsidiary of South Korean giant Samsung Group, by far the largest of the family-controlled conglomerates that dominate in Asia’s fourth-largest economy.
The giant said in a regulatory filing that its April-June operating fits were expected to drop to 4. 6 trillion won ($3. 3 billion)—down 56% from a year earlier and 31% from the previous quarter.
The figure was 23. 4% lower than the average estimate, according to South Korea’s Yonhap news agency, which cited its own financial data firm. Sales were estimated at 74 trillion won, down 0.
1% from a year earlier and 6. 5% from the previous quarter. The company did not disclose its net income or the detailed earnings of its divisions.
In a separate release, the company explained why the results “fell short of market expectations”.
The company’s key semiconductors division “recorded a quarter-on-quarter decline in fit due to inventory value adjustments and the impact of U. Restrictions on advanced AI chips for China”, it said.
Washington has expanded efforts to prevent Beijing getting state-of-the-art chips over concerns that they could be used to advance the country’s military systems and other capabilities.
The restrictions mean the company’s high- factories were running well below capacity.
However, Samsung jected that in the second half of the year it would trim operating losses “as utilization imves due to a gradual recovery in demand”. S in Samsung were down around 0.
8% in Seoul on Tuesday.
‘Weak foundry’ The sharp fit and revenue drop is attributed “primarily to the weak foundry, while the performance of the memory stayed relatively stable”, Tom Hsu, an analyst at TrendForce told AFP.
The outlook for the next quarter is more optimistic, with “memory chip prices and shipments to keep rising, thanks to strong demand”, especially from data centers, added Hsu, including for AI.
Performance from the company’s HBM chips—used for advanced AI computing—”ly fell short of expectations”, said Chae Min-sook, an analyst at Korea Investment and Securities.
In addition, a price drop for its NAND—used for data storage—”ly widened losses slightly”, Chae added.
“The sharp decline in the won-dollar exchange rate since June will ly weigh on both sales and operating fit (for the second quarter),” she added.
Samsung is among the smartphone makers under pressure from U. President Donald Trump, who has threatened South Korea with 25% tariffs in a letter to Seoul on Monday.
Trump has repeatedly demanded that global companies—including Samsung and rival Apple—relocate duction to the United States, which many experts warn is unrealistic, citing complex Asia-based supply chains.
South Korea has already been hit by levies on steel and car exports, and said Tuesday it was maintaining “close communication” with the Trump administration as it sought to head off additional measures.