“Samsung Electronics faces a 56% profit drop in Q2 2025, driven by U.S. curbs on AI chip sales to China and delays in high-bandwidth memory (HBM) supply to Nvidia. Despite a slight revenue dip, the semiconductor giant expects a Q3 rebound fueled by memory chip demand.”
Samsung’s Semiconductor Slump: AI Chip Woes Deepen
Sharp Profit Decline: Samsung Electronics projected a 56% plunge in second-quarter operating profit, reporting 4.59 trillion won ($3.4 billion), down from 10.44 trillion won a year earlier. This was 23.4% below analyst estimates, marking the company’s performance in six quarters.
U.S. AI Chip Curbs Impact: U.S. export controls on advanced AI chips to China, citing potential military applications, severely hit Samsung’s semiconductor division. The company attributed the profit fall partly to inventory value adjustments due to these restrictions.
HBM Delays and Competition: Samsung faced setbacks in supplying high-bandwidth memory (HBM) chips to Nvidia, a key customer. Rivals SK Hynix and Micron capitalized on robust AI-driven demand, while Samsung struggled with HBM quality issues and competition from Chinese firms.
Foundry Business Struggles: The company’s foundry operations reported operating losses due to low utilization rates and U.S. trade curbs. Weak demand for non-memory chips further strained earnings, though Samsung expects losses to narrow in the second half.
Revenue and Market Outlook: Revenue dipped marginally by 0.1% to 74 trillion won. Despite the Q2 setback, Samsung anticipates a Q3 recovery, driven by rising memory chip prices and demand from data centers, particularly for AI applications.
Mobile Division Bright Spot: Samsung’s mobile division likely saw profit growth, bolstered by new launches like the Galaxy S series and mid-range phones. The company is banking on upcoming foldables to drive sales in the second half.
Strategic Moves: To restore investor confidence, Samsung announced a 3.9 trillion won share buyback program. The company also stated that its advanced HBM chips are undergoing customer evaluation, with shipments progressing.
Disclaimer: This article is based on recent news reports and publicly available data from sources like Reuters, The Hindu, and Times of India. Information is accurate as of July 8, 2025, and subject to change as new details emerge.
