Samsung Electronics (OTCPK:SSNLF) said on Tuesday that it expects a 56% slash in Q2 operating profit compared to last year as the South Korean giant witnessed sluggish chip business due to U.S. trade curbs on China.

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.