Samsung Electronics announced a $1 billion increase in investment yesterday, hoping a strong recovery in semiconductors will make up for weakening smartphone growth as it faces mounting pressure to produce eye-catching new gadgets.

The high-end smartphone market, which Samsung dominates along with Apple, is slowing, and the South Korean giant is struggling to convince investors it can crack the rapidly growing low-end segment, where its rivals include China's Huawei Technologies and ZTE Corp .

Samsung reported a 47.5 per cent rise in April-June operating profit of a record 9.53 trillion won ($8.54 billion), in line with its estimate. However profits at its mobile division, which generates two-thirds of its total earnings, slipped 3.5 per cent from the previous quarter even with the launch of its flagship Galaxy S4 in late April, sparking concerns its mobile growth momentum may have stalled.

Samsung warned that global smartphone sales growth could weaken further in the third quarter, and said it expected stiffer competition due to new product launches.