Samsung Electronics on Tuesday projected a far worse than expected 56% plunge in second-quarter operating profit due to weak AI chip sales, deepening investor concerns over the tech giant's ability to revive its struggling semiconductor business.

In the June quarter, the company’s operating profit dropped by a sharper-than-expected 56 per cent, largely due to inventory write downs triggered by U.S. export restrictions on AI chips destined for China.

Samsung Electronics has projected a sharp 56% decline in its second-quarter operating profit, citing weak AI chip sales and intensifying US restrictions on advanced chip exports to China. The profit warning has sparked renewed concerns over the South Korean tech giant’s ability to turn around its struggling semiconductor division.