*

Samsung sees Q2 profit at 4.6 trln won v 6.2 trln won

analysts'

estimate

*

Company blames miss on US curbs on AI chip sales to China

*

Analysts cite delays in Samsung AI chip supply to Nvidia ( NVDA )

*

Samsung shares inch up 0.4%

(Adds analysts' comments in paragraphs 5-7, 10, share price and

buyback in paragraph 9)

By Heekyong Yang and Joyce Lee

SEOUL, July 8 (Reuters) - Samsung Electronics ( SSNLF )

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.

The world's biggest memory chipmaker blamed the profit miss

on U.S. restrictions on advanced AI chips for China, but

analysts said the decline was also due to delays in supplying

high-bandwidth memory (HBM) chips to key U.S. customer Nvidia ( NVDA )

.

In March, Samsung flagged meaningful progress on its latest

HBM 3E 12-layer chips could come as early as June. But on

Tuesday it gave no update on supply to Nvidia ( NVDA ), only saying its

improved HBM products were undergoing customer evaluation and

proceeding with shipments.

Key rivals SK Hynix ( HXSCF ) and Micron have

benefited from robust demand for memory chips driven by AI

growth in the United States, but Samsung relies more on China,

where sales of advanced chips are restricted by the U.S. and

competition with local rivals is growing.

"For Samsung Electronics ( SSNLF ), the key issue remains regaining

competitiveness ... Everything ultimately comes back to HBM,"

said Ryu Young-ho, a senior analyst at NH Investment &

Securities.

Potential U.S. tariffs also cloud the outlook for Samsung's

mainstay chip and phone businesses, pressuring margins.

"It will also be difficult to raise prices immediately due

to competition, making it challenging to sustain high margins,"

Ryu said.

Despite the concerns, Samsung Electronics ( SSNLF ) shares rose 0.4%

versus a 1.5% gain in the benchmark KOSPI's as of 0030

GMT. It said it plans to buy back 3.9 trillion won ($2.85

billion) worth of its shares, part of a 10 trillion won buyback

announced last November.

Analysts said they expect Samsung's profit to improve

gradually, supported by the launch of new phones and growth in

sales of HBM chips to non-Nvidia ( NVDA ) customers.

Samsung estimated an operating profit of 4.6 trillion won

for the April-June period, versus a 6.2 trillion won LSEG

SmartEstimate.

That would be its weakest in six quarters, down from 10.4

trillion won in the same period a year earlier and 6.7 trillion

won in the preceding quarter.

"The DS Division recorded a quarter-on-quarter decline in

profit due to inventory value adjustments and the impact of U.S.

restrictions on advanced AI chips for China," Samsung said in a

statement, referring to its Device Solutions division, which

houses its chip business.

Revenue would likely fall 0.1% to 74 trillion won from a

year earlier, the filing showed.

Samsung said earnings in its foundry business also fell,

driven by sales restrictions and related inventory value

adjustments stemming from U.S. export controls on advanced AI

chips for China, as well as continued low utilisation rates.

It expects the operating loss in its foundry business to

narrow in the second half of the year as utilisation improves in

line with a gradual recovery in demand.

The company plans to release detailed results including a

breakdown of earnings for each of its businesses on July 31.

($1 = 1,368.7000 won)