Samsung Electronics semiconductor division's second-quarter operating profit fell far short of expectations.

Samsung Electronics' semiconductor division reported second-quarter operating profits far below expectations, highlighting the deepening crisis faced by the world's largest memory chip manufacturer. The key business unit achieved operating profits of 4 trillion Korean won in the quarter ending in June, while analysts had expected 27.3 trillion Korean won. The lower-than-expected profits were mainly attributed to US export controls on high-bandwidth memory chips and losses in the chip foundry department. South Korea's largest company had issued a profit warning earlier this month. The company announced on Thursday a second-quarter net profit of 4.93 trillion Korean won, lower than analysts' expectations of 6.37 trillion Korean won. Samsung Electronics stated that despite strong demand for high-end storage chips in servers, profits still declined due to its chip foundry department, which relies partially on the Chinese market, experiencing oversupply of AI chips due to US export controls, leading to one-time inventory costs and a decrease in capacity utilization. Samsung Electronics expressed optimism that the chip foundry department will narrow its losses in the second half of this year as demand gradually recovers.