SEOUL: South Korean tech giant Samsung Electronics’ operating profit dropped by more than 50 per cent year-on-year in the second quarter, its regulatory filing showed Thursday (Jul 31), as US curbs on AI chip exports to China hit sales.
The company reported an operating profit of 4.7 trillion won (US$3.4 billion) for the April-June period, marking a 55 per cent decline from a year earlier, according to the filing.
The company’s net profit came in at 5.1 trillion won, marking a 48 per cent year-on-year decline, the filing showed.
“Despite significant growth in revenue from the first quarter, earnings for the Foundry Business remained weak due to the impact of inventory value adjustments that stemmed from US export restrictions on advanced AI chips to China,” Samsung said in a press release.
Going into the second half of the year its foundry business will “ramp up mass production”, the company said, adding it will strive to “improve factory utilisation and profitability through expanded sales to major customers”.
“AI demand is expected to remain robust due to continued investments by major cloud service providers, and therefore server demand for both DRAM and NAND is expected to stay strong,” Samsung said, referring to processing chips and chips used for data storage.
Samsung Electronics is the flagship unit of South Korea’s Samsung Group, by far the largest of the family-run conglomerates that dominate Asia’s fourth-largest economy.
