Samsung Electronics has projected a 56% year-on-year decline in second-quarter (Q2) operating profit for 2025, flagging current delays in AI chip deliveries and pressure from U.S. export controls as the primary reasons behind the downturn.
The company estimates operating profit at ₩4.6 trillion ($3.36 billion) for the April–June quarter, far below the ₩6.2 trillion average analyst estimate and the lowest in six quarters. Samsung also expects revenue to edge down by 0.1% to ₩74 trillion.
Samsung Q2 Profit Projected to Drop 39% Ahead of Official Release
The drop is linked to multiple challenges in its semiconductor division. Despite earlier announcements, Samsung’s 12-layer HBM3E chips are still undergoing evaluation and have yet to be certified by Nvidia.
In contrast, SK Hynix and Micron have begun mass production and shipment of certified chips, giving them a critical lead in the competitive AI memory chip market.
“Everything ultimately comes back to HBM,” said Ryu Young-ho, senior analyst at NH Investment & Securities. “For Samsung Electronics, the key issue remains regaining competitiveness.”
Analysts say Samsung’s failure to meet certification deadlines has led to large inventories of unsold chips and write-downs. The chip division’s profit is projected at ₩500 billion, a year-on-year fall of over 90%.
Adding to the issue, U.S. restrictions on exporting advanced AI chips to China have hit Samsung harder than its peers, due to its higher exposure to Chinese markets, about 20% of its HBM sales come from China.
The U.S. government is also reportedly reviewing existing export licenses for chipmakers operating in China, which could further impact Samsung’s supply chain and market access.
Samsung’s foundry business suffered as well, plagued by low utilisation rates and inventory-related losses. However, the company expects these to narrow in the second half of the year as demand gradually recovers.
In the smartphone division, Q2 sales held steady due to pre-emptive stockpiling ahead of potential 25% U.S. tariffs on non-U.S.-made phones. Nonetheless, analysts warn of muted growth in 2025 as uncertainty around tariffs weighs on global smartphone shipments.
To stabilise its stock, Samsung announced a ₩3.9 trillion ($2.85 billion) share buyback—part of a previously unveiled ₩10 trillion repurchase programme. The market, however, reacted cautiously, with shares slipping 0.2%, even as the broader KOSPI index rose 1.2%.
Looking forward, industry analysts anticipate a slow recovery, supported by:
- Nvidia certification of HBM3E chips
- HBM4 mass production using 6th-gen DRAM
- The July 9 launch of new foldable smartphones at the Galaxy Unpacked event
Samsung will release its full financial report, including divisional earnings, on 31 July.
