SEOUL: South Korean tech giant Samsung Electronics reported a sharp 55% drop in second-quarter operating profits, citing US export restrictions on AI chips to China as a major factor.
The company posted 4.7 trillion won ($3.4 billion) in operating profit for April-June, down from 10.4 trillion won a year earlier.
Net profit also fell 48% to 5.1 trillion won, according to regulatory filings. “Earnings for the Foundry Business remained weak due to inventory adjustments from US export curbs,“ Samsung said in a statement.
The company acknowledged challenges but expressed optimism about AI-driven demand in the second half of 2025.
Despite the downturn, Samsung highlighted two positive developments: a $16.5 billion deal with Tesla to supply AI6 chips until 2033 and the legal clearance of chairman Lee Jae-yong.
Analysts see the Tesla agreement as crucial for Samsung’s competitiveness against rivals like TSMC and SK hynix.
“AI demand is expected to remain robust,“ Samsung said, pointing to sustained investments by cloud service providers.
The firm plans to ramp up production and improve profitability through expanded sales to key clients. - AFP
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