Samsung Electronics forecast a 39% drop in second-quarter operating profit due to delays in shipments of advanced memory chips to Nvidia.
The largest memory chip maker is expected to record an operating profit of $4.6 billion for the April-June period, its lowest revenue in six years.
The weak financial performance has raised investor concerns about the South Korean tech giant's ability to compete with smaller rivals in the development of high-bandwidth memory (HBM) chips for AI data centers.
Major rivals such as Micron and SK Hynix have benefited from demand for AI chips, while Samsung's profits have declined due to its reliance on the Chinese market, which has been hit by US sanctions.
However, the company began supplying the chips to AMD in June.
Analysts also expect Samsung's smartphone sales to remain strong, supported by early demand ahead of possible US tariffs on smartphone imports.
The US government is also considering withdrawing approvals for chipmakers such as Samsung, making it harder for them to get US technology into their factories in China.
