Samsung Electronics projected a steep decline in second-quarter operating profit, signaling continued pressure on the world’s largest memory chipmaker from export restrictions and sluggish demand.
The South Korean technology conglomerate estimated operating profit of 4.6 trillion won ($3.4 billion) for the three months ended June, down 56% from 10.44 trillion won a year earlier. Sales are expected to remain flat at approximately 74 trillion won ($54.0 billion), matching the prior-year period but declining from 79.14 trillion won in the first quarter.
The profit warning underscores Samsung’s struggle with U.S. export controls on AI chips and reduced demand for high-bandwidth memory products. The company cited “erosion of average selling price” in its memory business and decreased HBM sales due to export restrictions in its previous quarterly results.
Samsung’s semiconductor division, which generates the bulk of its profits, has faced headwinds from both geopolitical tensions and inventory adjustments by customers. The company’s foundry business has also grappled with low utilization rates and sluggish mobile demand.
The guidance places Samsung’s operating margin at roughly 6.2%, well below the double-digit margins the company enjoyed during previous memory boom cycles.
