Samsung Electronics faces a pivotal moment in the AI chip market, battling weak profits, delayed HBM shipments, and U.S. export curbs while investing heavily to regain leadership.

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 has projected a sharp 56% decline in its second-quarter operating profit, citing weak AI chip sales and intensifying US restrictions on advanced chip exports to China. The profit warning has sparked renewed concerns over the South Korean tech giant’s ability to turn around its struggling semiconductor division.