Samsung’s operating profit falls 55 pct in second quarter

SEOUL

South Korean tech giant Samsung Electronics' operating profit dropped by 55 percent year-on-year in the second quarter, its regulatory filing showed on Thursday, as U.S. curbs on AI chip exports to China hit sales.

The company reported an operating profit of 4.7 trillion won ($3.4 billion) for the April-June period, marking a 55.5 percent decline from a year earlier, according to the filing.

The company's net profit came in at 5.1 trillion won, marking a 48 percent year-on-year decline,

"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 U.S. export restrictions on advanced AI chips to China," Samsung said in a press release.

The earning report follows Samsung's signing of a $16.5 billion deal with Tesla under which it will provide the electric car maker with AI6 chips through the end of 2033.

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.