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.

Samsung forecasts a 55.9 per cent fall in Q2 profit due to weak chip demand, US trade curbs, and inventory costs. Q3 recovery expected with higher HBM demand and improved foundry utilisation.

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.