Samsung Electronics reported a sharp decline in its second-quarter operating profit, which fell 56% year-over-year to 4.6 trillion won ($3.3 billion), significantly missing market expectations of a 41% drop. The company attributed the profit slump primarily to weak sales of advanced AI chips, delays in supplying high-bandwidth memory (HBM) chips to key customer Nvidia, and the impact of U.S. export controls on advanced AI chip sales to China. Despite revenue rising slightly by 1% to 74.6 trillion won ($53.5 billion), the semiconductor division's operating profit plunged by approximately 94%, reflecting inventory write-downs and a challenging market environment. Chip sales revenue decreased to 27.9 trillion won from 28.56 trillion won a year earlier, with chip operating profit falling far below estimates to 400 billion won from an expected 2.73 trillion won. Samsung's struggles mark its first profit decline since 2023 and have raised investor concerns about its ability to revive its semiconductor business amid ongoing U.S. trade restrictions. The company forecasts an earnings recovery in the second half of 2025, anticipating increased demand for DRAM and NAND memory chips and a rise in DRAM prices. Meanwhile, LG Electronics also reported a 46.6% drop in its second-quarter operating profit to 639.1 billion won, missing estimates and reflecting broader challenges in the semiconductor and electronics sectors.