Samsung Electronics is slashing profits as AI chip export limits and Nvidia deal hiccups bite hard.
Operating profit dropped 56% year-over-year to 4.6 trillion won ($3.3 billion) in Q2, missing analyst predictions of a 41% fall. Revenue hit 74 trillion won.
US restrictions on AI chips headed to China are squeezing Samsung’s sales. The company also ran into trouble selling its high-end memory chips to Nvidia — a critical customer. 
Samsung flagged one-time inventory costs as a factor in the profit plunge. It is still testing and shipping advanced memory products but warned contract chipmaking losses will drag on before demand picks up later this year.
Samsung said:
One-time inventory-related costs contributed to the drop, and customer evaluation and shipments of its advanced memory products are proceeding.
Operating losses in its contract chipmaking business are expected to narrow in the second half of the year on a gradual recovery in demand.
