Samsung projects a 56% plunge in operating profit, blaming U.S. chip controls on China

The company is the leading sub -company for the South Korean Giant Samsung Group, to a large extent the largest family -controlled blocs that dominate business in the fourth largest economy in Asia.

The technology giant said in an organizational file that operating profits are expected to decrease in April to June to 4.6 trillion Won ($ 3.3 billion) -56 % over the previous year and 31 % of the previous quarter.

This number was 23.4 % less than average estimate, according to South Korea News Agency, which cited its financial data company.

Sales were estimated at 74 trillion Won, a decrease of 0.1 % from the previous year and 6.5 % from the previous quarter.

The company did not reveal its net income or detailed profits of its business sections.

In a separate version, the company clarified the reason for “market expectations”.

She said that the company’s main semiconductor department “recorded a decrease in a quarter of a quarter of a quarter due to the inventory value adjustments and the effect of American restrictions on the advanced artificial intelligence chips of China.”

Washington has expanded the efforts to prevent Beijing from obtaining modern chips due to fears that they could be used to strengthen military systems in the country and other technical capabilities.

Restrictions mean that the company’s high -tech factories were working much less than the capacity.

However, Samsung expected that in the second half of the year, operating losses “will be done with improvement due to the gradual recovery in demand.”

The stocks in Samsung fell about 0.8 % in Seoul on Tuesday.

“A weak muse”

Low profit and sharp revenues “primarily to the work causing weak cause, while the performance of memory works remained relatively stable.”

The expectations for the next quarter are more optimistic, as “memory prices and charges to maintain height, thanks to strong demand”, especially from data centers, added HSU, including for artificial intelligence.

“It is possible that the performance of the company’s HBM chips-which is used to have advanced artificial intelligence computing-said.

In addition, the low prices for Nand – used to store data – “may be a little medium losses,” added Chai.

She added: “The sharp decline in the exchange rate that has won dollars since June is likely to burden both sales and operational profits (for the second quarter).”

Samsung is among the smart phone makers of pressure from US president Donald Trump, who threatened South Korea by 25 % in a message to Seoul on Monday.

Trump has repeatedly called on international companies-including Samsung and Apple-to produce production to the United States, which many experts warn of complex supply chains based on Asia.

South Korea has already been subjected to graphics on steel and cars, and said on Tuesday that it was maintaining “close communication” with the Trump administration, as it sought to get rid of additional measures.