Samsung Q2 Profit Drops 56% Amid AI Demand

Samsung Electronics has projected a sharp decline in second-quarter operating profit, estimating it at 4.6 trillion won (approximately $3.5 billion), down from 10.44 trillion won a year earlier. The forecast falls well below analyst expectations, with LSEG’s SmartEstimate placing it closer to 6.26 trillion won. Revenue is also expected to come in at 74 trillion won, slightly under projections.

The dip in performance has been attributed to several challenges, including inventory value adjustments and US restrictions on advanced AI chip exports to China. Samsung has also lagged behind competitors like SK hynix and Micron in the fast-growing high-bandwidth memory (HBM) chip market, critical for AI applications.

Analysts note that Samsung’s foundry business continues to post losses, with weak demand and pressure from TSMC adding to its struggles. While the company has secured some HBM supply deals with AMD, experts believe the impact will not reflect in this quarter’s earnings.

Despite these headwinds, Samsung shares have risen over 16% this year. However, the recent earnings outlook led to a slight dip of 1.13% in early trading on July 8. The company is set to release full results later this month.