Samsung's Q2 Profit Plummets Amid AI Chip Challenges and US Trade Restrictions

Samsung Elec Q2 profit likely to drop 39% on weak AI chip sales

SEOUL, July 7 (Reuters) - Samsung Electronics (005930.KS), opens new tab is expected to forecast a 39% plunge in second-quarter operating profit on Tuesday, weighed down by delays in supplying advanced memory chips to artificial intelligence chip leader Nvidia (NVDA.O), opens new tab. The world's biggest maker of memory chips is projected to report an April-June operating profit of 6.3 trillion won ($4.62 billion), its lowest income in six quarters and fourth consecutive quarterly decline, according to LSEG SmartEStimate. The prolonged weakness in its financial performance has deepened investor concerns over the South Korean tech giant's ability to catch up with smaller rivals in developing high-bandwidth memory (HBM) chips used in artificial intelligence data centres. Its key rivals, SK Hynix (000660.KS), opens new tab and Micron (MU.O), opens new tab, have benefited from robust demand for memory chips needed for AI, but Samsung's gains have been subdued as it relies on the China market, where sales of advanced chips have been restricted by the U.S. Its efforts to get the latest version of its HBM chips to Nvidia certified by Nvidia are also moving slowly, analysts said. "HBM revenue likely remained flat in the second quarter, as China sales restrictions persist and Samsung has yet to begin supplying its HBM3E 12-high chips to Nvidia," said Ryu Young-ho, a senior analyst at NH Investment & Securities. He said Samsung's shipments of the new chip to Nvidia are unlikely to be significant this year. Samsung, which expected in March that meaningful progress over its HBM chip could come as early as June, declined to comment on whether its HBM 3E 12-layer chips had passed Nvidia's qualification process. The company, however, has started supplying the chip to AMD, the U.S. firm said, opens new tab in June. Samsung's smartphone sales are likely to remain solid, helped by demand for stock ahead of potential U.S. tariffs on imported smartphones, analysts said. Many of its key businesses including chips, smartphones and home appliances continue to face business uncertainty from various U.S. trade policies including President Donald Trump's proposal for a 25% tariff on non-US-made-smartphones and the July 9 deadline for "reciprocal" tariffs against many of its trading partners. The U.S. is also considering revoking authorisations granted to global chipmakers including Samsung, making it more difficult for them to receive U.S. technology at their plants in China. Shares in Samsung, the worst performing stock among major memory chipmakers this year, have climbed about 19% this year, underperforming a 27.3% rise in the benchmark KOSPI (.KS11), opens new tab. ($1 = 1,363.3600 won) Reporting by Heekyong Yang; Editing by Miyoung Kim and Sonali Paul Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence

Samsung profits take big hit from US chip controls and AI memory shortfalls

Samsung Electronics delivered an earnings shock on Tuesday, projecting a 56 per cent drop in second-quarter operating profit, as US restrictions on China and its struggle to supply key customer Nvidia with advanced memory products weighed on its performance. The company, one of the world's largest makers of memory chips, estimated its operating profit for April to June at Won4.6tn ($3.3bn), its weakest in six quarters and the fourth consecutive quarterly decline. It was significantly lower than the Won6.3tn profit forecast by LSEG SmartEstimate. Sales were little changed at Won74tn. Samsung's device solution division, which houses its chip business, recorded a quarter-on-quarter "decline in profit due to inventory value adjustments and the impact of US restrictions on advanced [artificial intelligence] chips for China", the company said. The worse than expected guidance will intensify concerns about the continuing delays in the South Korean tech giant being able to supply its latest HBM3E chips to AI leader Nvidia. Smaller rivals SK Hynix and Micron Technology are enjoying booming demand for their advanced HBM chips. Samsung recently began supplying HBM3E to chipmakers AMD and Broadcom, but has yet to win Nvidia's approval of its performance. With the company failing to capitalise on the AI boom, Samsung shares have gained just 20 per cent so far this year, largely due to their relatively low valuation, while SK Hynix shares have surged almost 60 per cent. In June, Samsung recorded its lowest share of South Korea's flagship Kospi stock benchmark for nine years. Last month, Micron forecast stronger than expected quarterly revenues on robust demand for HBM chips, while SK Hynix, the main HBM supplier to Nvidia, is expected to report record quarterly earnings. Samsung said its improved HBM chips were undergoing customer evaluation and were being shipped, but did not name the clients. Analysts estimate Samsung suffered more than Won4tn of foundry losses in the first half, as the company failed to secure big customers for its contract manufacturing business, due to poor yields and the widening gap with industry leader TSMC. Samsung said US curbs on China-bound AI chips also had an adverse impact on the foundry business, but it expected operating losses to narrow in the second half on a gradual recovery in demand. "The non-memory business experienced a decline in earnings due to sales restrictions and related inventory value adjustments stemming from US export restrictions on advanced AI chips for China, as well as continued low utilisation rates," the company said. "What counts most is its HBM supply to [Nvidia] and the overall chip demand recovery," said analysts at DS Investment & Securities in a recent report. "But [Samsung's] earnings will probably rebound in the third quarter after hitting the bottom in the second." The group revealed earlier this year that the value of its exports to China had jumped 54 per cent between 2023 and 2024, as Chinese companies rushed to secure stockpiles of advanced AI chips in the face of increasingly restrictive US export controls. US tariffs are also hurting sales of Samsung TVs and other home appliances, while the stronger Korean won, which has appreciated about 7 per cent against the dollar so far this year, is also affecting its price competitiveness. Samsung hopes to regain ground in the smartphone market with the launch of thinner foldables in New York later this week. Global foldable handset shipments increased 12 per cent to 17.2mn units last year, but Samsung's share of the market fell from 54 per cent to 45 per cent.

Samsung expects a 56% drop in Q2 operating profit, far short of estimates

SEOUL, July 8 (Reuters) - Samsung Electronics (005930.KS), opens new tab on Tuesday projected a 56% drop in second-quarter operating profit from a year earlier, missing analysts' estimates by far. Its chip business struggled with weak sales of artificial intelligence chips, dogged by delays in the supply of its latest chips to Nvidia (NVDA.O), opens new tab and continued losses in its contract chip manufacturing business, analysts said. The world's largest memory chipmaker estimated an operating profit of 4.6 trillion won for the April-June period, versus a 6.2 trillion won LSEG SmartEstimate. That would compare with 10.4 trillion won in the same period a year earlier and 6.7 trillion won in the preceding quarter. Revenue would likely fall 0.1% to 74 trillion won from a year earlier, the filing showed. Samsung is expected to release detailed results including a breakdown of earnings for each of its businesses in late July. Reporting by Heekyong Yang and Joyce Lee; Editing by Chris Reese and Sonali Paul Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Business

Samsung expects second-quarter profits to more than halve as it struggles to capture AI demand

The memory chip and smartphone maker said in its guidance that operating profit for the quarter ending June was projected to be around 4.6 trillion won for the April-June period, down from 10.44 trillion Korean won year over year. The figure is a deeper plunge compared to smart estimates from LSEG, which are weighted toward forecasts from analysts who are more consistently accurate. According to the smart estimates, Samsung was expected to post an operating profit of 6.26 trillion won ($4.57 billion) for the quarter. Meanwhile, Samsung projected its revenue to hit 74 trillion won, falling short of LSEG smart estimates of 75.55 trillion won. Samsung is a leading player in the global smartphone market and is also one of the world's largest makers of memory chips, which are utilized in devices such as laptops and servers. However, the company has been falling behind competitors like SK Hynix and Micron in high-bandwidth memory chips -- an advanced type of memory that is being deployed in AI chips. "The disappointing earnings are due to ongoing operating losses in the foundry business, while the upside in high-margin HBM business remains muted this quarter," MS Hwang, Research Director at Counterpoint Research, said about the earnings guidance. SK Hynix, the leader in HBM, has secured a position as Nvidia's key supplier. While Samsung has reportedly been working to get the latest version of its HBM chips certified by Nvidia, a report from a local outlet suggests these plans have been pushed back to at least September. The company did not respond to a request for comment on the status of its deals with Nvidia. Ray Wang, Research Director of Semiconductors, Supply Chain and Emerging Technology at Futurum Group told CNBC that it is clear that Samsung has yet to pass Nvidia's qualification for its most advanced HBM. "Given that Nvidia accounts for roughly 70% of global HBM demand, the delay meaningfully caps near-term upside," Wang said. He noted that while Samsung has secured some HBM supply for AI processors from AMD, this win is unlikely to contribute to second-quarter results due to the timing of production ramps. Meanwhile, Samsung's chip foundry business continues to face weak orders and serious competition from Taiwan Semiconductor Manufacturing Company, Wang added. Reuters reported in September that Samsung had instructed its subsidiaries worldwide to cut 30% of staff in some divisions, citing sources familiar with the matter.

Samsung's profit plunges as AI chip woes and US tariffs bite

Serving tech enthusiasts for over 25 years. TechSpot means tech analysis and advice you can trust. What just happened? Samsung Electronics shocked investors with a forecasted 56 percent drop in second-quarter operating profit, projecting earnings of 4.6 trillion Korean won (approximately $3.3 billion) for the April - June period. This would mark the company's weakest performance in a year and a half and falls well short of market expectations. The South Korean tech giant attributed its disappointing results to a combination of US export restrictions on advanced artificial intelligence chips bound for China and ongoing challenges in supplying key customer Nvidia with its latest high-bandwidth memory products. "The non-memory business experienced a decline in earnings due to sales restrictions and related inventory value adjustments stemming from US export restrictions on advanced AI chips for China, as well as continued low utilization rates," the company said. Samsung's device solutions division, which includes its semiconductor business, reported a quarter-on-quarter decline in profit. The company cited inventory value adjustments and the impact of US export restrictions on shipments to China as the main drivers. While Samsung has recently begun shipping its new HBM3E chips to companies such as AMD and Broadcom, it has yet to secure Nvidia's approval, a critical step for regaining momentum in the fast-growing AI hardware market. Meanwhile, rivals SK Hynix and Micron Technology are benefiting from robust demand for HBM chips. SK Hynix, Nvidia's primary supplier, is expecting record quarterly earnings, while Micron last month projected stronger-than-expected revenue on the back of booming HBM demand. Samsung's shares have risen just 20 percent this year, compared to nearly 60 percent for SK Hynix. Analysts estimate that Samsung lost more than 4 trillion won in foundry operations during the first half of the year, as it struggled to attract major customers for its contract chip manufacturing business. The company's difficulties stem from poor production yields and a widening technology gap with industry leader TSMC. "What counts most is its HBM supply to [Nvidia] and the overall chip demand recovery," analysts at DS Investment & Securities said in a recent report. "But [Samsung's] earnings will probably rebound in the third quarter after hitting the bottom in the second." US tariffs are compounding Samsung's challenges. The company noted that duties on South Korean goods are hurting sales of TVs and home appliances, while a stronger Korean won - up seven percent against the US dollar this year - has eroded its price competitiveness. "As macro uncertainties such as the change of a tariff policy continue to expand, demand volatility is expected to be quite high accordingly," Jaejune Kim, an executive vice president, said during an earnings call. The competitive landscape is becoming even more crowded as Chinese companies like ChangXin Memory Technologies and Huawei ramp up HBM chip production, further threatening Samsung's market share. In the logic chip segment, Samsung has also fallen behind TSMC, another major supplier to Nvidia. Trade tensions between the US and South Korea remain unresolved. On Monday, President Donald Trump announced that South Korean goods would face a 25 percent tariff starting August 1, matching a rate he had initially proposed in April. South Korean President Lee Jae Myung described the negotiations as "very difficult," telling reporters that "the two sides are not really clear on what they want." Samsung is set to report its full second-quarter earnings on July 31. The company remains under pressure to close the gap with rivals and navigate an increasingly complex global trade environment.

Samsung projects a 56% plunge in operating profit, blaming U.S. chip controls on China

The firm is the flagship subsidiary of South Korean giant Samsung Group, by far the largest of the family-controlled conglomerates that dominate business in Asia's fourth-largest economy. The tech giant said in a regulatory filing that its April-June operating profits were expected to drop to 4.6 trillion won ($3.3 billion) -- down 56% from a year earlier and 31% from the previous quarter. The figure was 23.4% lower than the average estimate, according to South Korea's Yonhap news agency, which cited its own financial data firm. Sales were estimated at 74 trillion won, down 0.1% from a year earlier and 6.5% from the previous quarter. The company did not disclose its net income or the detailed earnings of its business divisions. In a separate release, the company explained why the results "fell short of market expectations". The company's key semiconductors 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", it said. Washington has expanded efforts to prevent Beijing getting state-of-the-art chips over concerns that they could be used to advance the country's military systems and other tech capabilities. The restrictions mean the company's high-tech factories were running well below capacity. However, Samsung projected that in the second half of the year it would trim operating losses "as utilization improves due to a gradual recovery in demand". Shares in Samsung were down around 0.8% in Seoul on Tuesday. The sharp profit and revenue drop is attributed "primarily to the weak foundry business, while the performance of the memory business stayed relatively stable", Tom Hsu, an analyst at TrendForce told AFP. The outlook for the next quarter is more optimistic, with "memory chip prices and shipments to keep rising, thanks to strong demand", especially from data centers, added Hsu, including for AI. Performance from the company's HBM chips -- used for advanced AI computing -- "likely fell short of expectations", said Chae Min-sook, an analyst at Korea Investment and Securities. In addition, a price drop for its NAND -- used for data storage -- "likely widened losses slightly", Chae added. "The sharp decline in the won-dollar exchange rate since June will likely weigh on both sales and operating profit (for the second quarter)," she added. Samsung is among the smartphone makers under pressure from U.S. President Donald Trump, who has threatened South Korea with 25% tariffs in a letter to Seoul on Monday. Trump has repeatedly demanded that global companies -- including Samsung and rival Apple -- relocate production to the United States, which many experts warn is unrealistic, citing complex Asia-based supply chains. South Korea has already been hit by levies on steel and car exports, and said Tuesday it was maintaining "close communication" with the Trump administration as it sought to head off additional measures.

Samsung Q2 profits to tumble on weak AI chip sales to China

Samsung is bracing for a steep drop in profits this quarter, pointing to weaker AI-chip sales and ongoing U.S. export restrictions on advanced chips to China as key factors behind the slump. The company said Tuesday it expects operating profit for the April-June period to land around 4.6 trillion won ($3.4 billion), down 56% from a year ago. That figure also falls well short of analysts' expectations for the second quarter of 2025, which were closer to 6.2 trillion won ($4.5 billion). If confirmed later this month, it would be Samsung's weakest profit in six quarters. Second-quarter revenue, meanwhile, is expected to hold steady at roughly 74 trillion won ($53.9 billion) -- from 74.07 trillion won a year earlier. Samsung, the world's largest memory chipmaker, blamed part of the miss on tightened U.S. restrictions limiting exports of AI chips to China, which remains a critical market for its semiconductor business. But there are other challenges in play. Analysts say delays in supplying its latest high-bandwidth memory (HBM) chips to Nvidia have also weighed on results. Earlier this year, Samsung suggested its new HBM 3E 12-layer chips could be ready for customers by June. On Tuesday, however, the company didn't provide any update on shipments to Nvidia, only noting that the products are still undergoing evaluation. While rivals like SK Hynix and Micron have benefited from strong AI-driven demand for memory chips in the U.S., Samsung's heavier reliance on China has left it more exposed to export restrictions and rising competition from local chipmakers. Samsung projects that its chip division earned an operating profit of around 500 billion won for the quarter, a drop of more than 90% from a year earlier. The company said chip profits were hit partly by inventory value adjustments, though it didn't go into specifics. Analysts believe unsold HBM chips meant for Nvidia may have contributed to writedowns. Not everything was downbeat. Samsung thinks its mobile business likely saw improved profits during the quarter thanks to new phone launches, providing at least some offset to the semiconductor decline. Samsung shares slipped 0.2% on Tuesday, underperforming the broader KOSPI index, which was up 1.2%. Looking ahead, Samsung expects profits to recover gradually in the second half of the year, as demand picks up and sales of its HBM chips to non-Nvidia customers increase. The company also announced plans to buy back 3.9 trillion won ($2.85 billion) worth of shares as part of a broader buyback program announced last year. Samsung will release its full second-quarter earnings report, with detailed breakdowns for each division, on July 31.

Samsung warns of big profit miss from US restrictions on advanced AI chip exports - SiliconANGLE

Samsung warns of big profit miss from US restrictions on advanced AI chip exports Semiconductor and smartphone giant Samsung Electronic Co. Ltd. said on Tuesday morning in South Korea that it's anticipating its second quarter profit to decline 56% from a year earlier, due to sluggish sales in its chip business and the impacts of U.S. trade restrictions. The forecast comes in much lower than what analysts had expected. Samsung said in a preliminary earnings statement that it's expecting a second quarter operating profit of 4.59 trillion won ($3.4 billion), down sharply from the 10.44 trillion won profit it posted in the year-ago period. Analysts had been targeting a profit of 6.2 trillion won, Reuters reported. On a sequential basis, Samsung's profit is expected to drop by around 31%, from 6.69 trillion won. Revenue for the period is expected to come to 74 trillion won, more or less flat from a year earlier. In a separate press release issued to South Korean media, Samsung blamed the unexpected decline in profit on inventory replacements and the negative impact of the U.S.'s expanded sanctions on the export of advanced artificial intelligence processors to China. "The memory business saw a decline in performance due to one-off costs, such as provisions for inventory asset valuation," the company said. "However, improved HBM products are currently being evaluated and shipped to customers." Samsung was referring to its High-Bandwidth Memory chips, which are a critical component of AI processors. The company has struggled to match the progress of its rival memory chipmaker SK Hynix Inc., which currently provides the vast majority of HBM chips to Nvidia Corp. for use in that company's graphics processing units. However, Samsung said it expects to see a sharp increase in HBM chip sales to Nvidia in the upcoming quarter, despite recent reports that its products have not yet passed the AI chip leader's quality tests. It also said its non-memory chipmaking foundry is expected to reduce its losses in the third quarter due to improved utilization rates and a recovery in global chip demand. Analysts said Samsung's profits were also hit by a decline in NAND flash prices and a stronger Korean won, and its stock was down 1% in early morning trading in Korea. Samsung has not yet disclosed detailed earnings regarding the performance of its individual business units, but analysts estimate that its semiconductor business will deliver an operating profit of around 1 trillion won, based on the company's preliminary forecast. The company is also unlikely to see much benefit from the launch of its new flagship smartphone, the AI-powered Galaxy S25, in January. Meanwhile, its television and home appliance businesses are also expected to see a drop in profitability, due partly to the impact of U.S. tariffs on imports. Although the report was disappointing for investors, Hyundai Motor Securities Co. analyst Roh Geun-chang said the company's profit is likely to rebound in the third quarter, driven by an expected increase in memory chip prices. "Samsung's operating profit appears to have bottomed out in the second quarter and is expected to show gradual improvement," the analyst told Yonhap.

Samsung warns of big profit miss due to U.S. restrictions on advanced AI chip exports - SiliconANGLE

Samsung warns of big profit miss due to U.S. restrictions on advanced AI chip exports Semiconductor and smartphone giant Samsung Electronic Co. Ltd. said on Tuesday morning in South Korea that it's anticipating its second quarter profit to decline 56% from a year earlier, due to sluggish sales in its chip business and the impacts of U.S. trade restrictions. The forecast comes in much lower than what analysts had expected. Samsung said in a preliminary earnings statement that it's expecting a second quarter operating profit of 4.59 trillion won ($3.4 billion), down sharply from the 10.44 trillion won profit it posted in the year-ago period. Analysts had been targeting a profit of 6.2 trillion won, Reuters reported. On a sequential basis, Samsung's profit is expected to drop by around 31%, from 6.69 trillion won. Revenue for the period is expected to come to 74 trillion won, more or less flat from a year earlier. In a separate press release issued to South Korean media, Samsung blamed the unexpected decline in profit on inventory replacements and the negative impact of the U.S.'s expanded sanctions on the export of advanced artificial intelligence processors to China. "The memory business saw a decline in performance due to one-off costs, such as provisions for inventory asset valuation," the company said. "However, improved HBM products are currently being evaluated and shipped to customers." Samsung was referring to its High-Bandwidth Memory chips, which are a critical component of AI processors. The company has struggled to match the progress of its rival memory chipmaker SK Hynix Inc., which currently provides the vast majority of HBM chips to Nvidia Corp. for use in that company's graphics processing units. However, Samsung said it expects to see a sharp increase in HBM chip sales to Nvidia in the upcoming quarter, despite recent reports that its products have not yet passed the AI chip leader's quality tests. It also said its non-memory chipmaking foundry is expected to reduce its losses in the third quarter due to improved utilization rates and a recovery in global chip demand. Analysts said Samsung's profits were also hit by a decline in NAND flash prices and a stronger Korean won, and its stock was down 1% in early morning trading in Korea. Samsung has not yet disclosed detailed earnings regarding the performance of its individual business units, but analysts estimate that its semiconductor business will deliver an operating profit of around 1 trillion won, based on the company's preliminary forecast. The company is also unlikely to see much benefit from the launch of its new flagship smartphone, the AI-powered Galaxy S25, in January. Meanwhile, its television and home appliance businesses are also expected to see a drop in profitability, due partly to the impact of U.S. tariffs on imports. Although the report was disappointing for investors, Hyundai Motor Securities Co. analyst Roh Geun-chang said the company's profit is likely to rebound in the third quarter, driven by an expected increase in memory chip prices. "Samsung's operating profit appears to have bottomed out in the second quarter and is expected to show gradual improvement," the analyst told Yonhap.

Samsung profit halves amid delays to certification for advanced AI chips

Samsung Electronics's profit has fallen for the first time since 2023, hurt by U.S. curbs on China-bound AI chips and hiccups in its plans to sell cutting-edge memory to Nvidia. South Korea's largest company reported preliminary operating profit of 4.6 trillion won ($3.3 billion) in the June quarter, a roughly 56% drop from a year ago. Analysts on average had projected a 41% decline. Revenue stood at 74 trillion won. One-time inventory-related costs contributed to the drop, and customer evaluation and shipments of its advanced memory products are proceeding, Samsung said in a statement. Operating losses in its contract chipmaking business are expected to narrow in the second half of the year on a gradual recovery in demand, Samsung said.

US Export Bans And Nvidia Supply Issues Crush Samsung Chip Profits -- Hopes Rest On Ultra-Thin Foldables, Smartwatches And Possible XR Debut At Galaxy Unpacked Event - Samsung Electronics Co (OTC:SSNLF), NVIDIA (NASDAQ:NVDA)

On Tuesday, Samsung Electronics Co. SSNLF reported a sharp 56% drop in second-quarter operating profit, citing U.S. export restrictions on advanced AI chips for China -- a blow to its semiconductor business just days before its major Galaxy Unpacked product launch. What Happened: The South Korean chipmaker estimated operating profit at 4.6 trillion won for the April-June period, missing the 6.2 trillion won forecast from LSEG SmartEstimate, reported Reuters. That marks Samsung's weakest profit in six quarters, down from 10.4 trillion won a year earlier. In a statement, Samsung attributed the decline to "inventory value adjustments and the impact of U.S. restrictions on advanced AI chips for China." See Also: Jensen Huang Gave $12.6 Million To Charity, Then Nvidia's Stock Made It Billions Sales were also impacted by delays in shipping high-bandwidth memory (HBM) chips to key U.S. customer Nvidia Corporation NVDA, the report said. Why It's Important: Samsung's semiconductor struggles underline its dependence on markets where U.S. trade policy now imposes major limitations, notably China. Meanwhile, rivals like SK Hynix and Micron have surged on AI-driven chip demand in the U.S., the report added. Detailed second-quarter earnings are expected on July 31. Subscribe to the Benzinga Tech Trends newsletter to get all the latest tech developments delivered to your inbox. Samsung's Galaxy Unpacked event on July 9 is expected to spotlight new foldable devices -- the Galaxy Z Fold 7 and Z Flip 7 -- with leaks pointing to camera upgrades, AI features and thinner designs. A third foldable, possibly a tri-fold smartphone, may also debut, hinted at by leaks and Samsung's use of the word "Ultra" in marketing. In addition to foldables, Samsung will likely unveil the Galaxy Watch 8 and Watch 8 Classic, with possible health-tracking improvements like blood glucose monitoring. There's also a chance Samsung could tease Project Moohan, its upcoming XR headset, though its appearance remains uncertain ahead of a late 2025 launch. Read Next: Amazon Loses Top AI Leader In High-Stakes Talent Shuffle Photo Courtesy: Sybillla on Shutterstock.com Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. NVDANVIDIA Corp$158.01-0.83%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum78.00Growth98.58QualityNot AvailableValue6.92Price TrendShortMediumLongOverviewSSNLFSamsung Electronics Co Ltd$42.48-%Market News and Data brought to you by Benzinga APIs

Samsung Elec Q2 profit likely to drop 39% on weak AI chip sales

Samsung Electronics is expected to forecast a 39 per cent plunge in second-quarter operating profit on Tuesday, weighed down by delays in supplying advanced memory chips to artificial intelligence chip leader Nvidia. The world's biggest maker of memory chips is projected to report an April to June operating profit of 6.3 trillion won (US$4.62 billion), its lowest income in six quarters, according to LSEG SmartEStimate. The prolonged weakness in its financial performance has deepened investor concerns over the South Korean tech giant's ability to catch up with smaller rivals in developing high-bandwidth memory (HBM) chips used in artificial intelligence data centers. Its key rivals, SK Hynix and Micron, have benefited from robust demand for memory chips needed for AI, but Samsung's gains have been subdued as it relies on the China market, where sales of advanced chips have been restricted by the U.S. Its efforts to get the latest version of its HBM chips to Nvidia certified by Nvidia are also moving slowly, analysts said. "HBM revenue likely remained flat in the second quarter, as China sales restrictions persist and Samsung has yet to begin supplying its HBM3E 12-high chips to Nvidia," said Ryu Young-ho, a senior analyst at NH Investment & Securities. He said Samsung's shipments of the new chip to Nvidia are unlikely to be significant this year. Samsung, which expected in March that meaningful progress over its HBM chip could come as early as June, declined to comment on whether its HBM 3E 12-layer chips had passed Nvidia's qualification process. The company, however, has started supplying the chip to AMD, the U.S. firm said in June. Samsung's smartphone sales are likely to remain solid, helped by demand for stock ahead of potential U.S. tariffs on imported smartphones, analysts said. Many of its key businesses including chips, smartphones and home appliances continue to face business uncertainty from various U.S. trade policies including President Donald Trump's proposal for a 25% tariff on non-US-made-smartphones and the July 9 deadline for "reciprocal" tariffs against many of its trading partners. The U.S. is also considering revoking authorisations granted to global chipmakers including Samsung, making it more difficult for them to receive U.S. technology at their plants in China. Shares in Samsung, the worst performing stock among major memory chipmakers this year, have climbed about 19 per cent this year, underperforming a 27.3 per cent rise in the benchmark KOSPI.

Samsung blames US AI chip curbs for big miss on profits

STORY: Samsung warned Tuesday (July 8) that it is set to miss earnings targets by a wide margin. The South Korean giant projected a 56% plunge in second-quarter operating profit, far worse than expected. Samsung blamed U.S. curbs on the sale of advanced AI chips to China. But analysts said the decline was also due to delays in supplying so-called high-bandwidth memory chips to key U.S. customer Nvidia. Samsung has acknowledged those delays, and had said progress could come by June. However, on Tuesday it would only say that products were undergoing customer evaluation. Key rivals SK Hynix and Micron have benefited from robust demand for AI-related chips in the U.S. But Samsung has been more reliant on sales to China. That has left it exposed to U.S. restrictions and growing competition from Chinese makers. Now potential Washington tariffs also cloud the outlook for the firm's mainstay products - memory chips and smartphones. Donald Trump has said South Korean exports to the U.S. will face a 25% duty from August 1. "If you want to play ball, this is what you have to pay." However, analysts do expect Samsung's profits to gradually improve, helped by new phones and sales of HBM chips to customers other than Nvidia. Shares in the firm were down around half a percent by early afternoon Tuesday. Samsung will release full details of its latest earnings at the end of the month.

Samsung still lagging behind in the memory chip market

Samsung Electronics expects a 39% drop in operating profit in Q2, amid delays in the delivery of advanced memory chips to Nvidia, the world's leading artificial intelligence chipmaker. In its next report, the South Korean giant is expected to announce operating profit of 6.3 trillion won ($4.62bn) for April-June, according to LSEG SmartEStimate estimates. This would be its lowest profit in six quarters. This poor performance is fueling investor concerns about Samsung's ability to compete with smaller rivals such as SK Hynix and Micron in the race to develop HBM (High Bandwidth Memory) chips used in AI data centers. While SK Hynix and Micron are taking full advantage of the surge in demand for these components, Samsung's gains remain limited, particularly due to its heavy exposure to the Chinese market, where sales of advanced chips are subject to restrictions imposed by the US. According to several analysts, Samsung is lagging behind in the certification process for its new "12-high" HBM3E chips by Nvidia. "HBM-related revenues likely remained flat in Q2 as export restrictions to China persist and Samsung has not yet started shipping its 12-layer HBM3E chips to Nvidia," said Ryu Young-ho, senior analyst at NH Investment & Securities. He does not expect significant shipment volumes to Nvidia this year. In March, Samsung said it expected significant progress on the HBM front by June. To date, the company has not confirmed whether its chips have been qualified by Nvidia. However, AMD said in June that it had started receiving these components. For now, it remains to be seen whether Samsung will manage to take the lead in the race for 4th-generation HBM chips. With ever-increasing data flows, these new chips represent a major challenge for the AI industry. Samsung's smartphone sales are expected to remain robust, supported by increased demand ahead of possible US tariff increases on imported products. Analysts believe that distributors are building up stocks as a precautionary measure, as the US is considering imposing a 25% tax on smartphones manufactured outside the country. However, regulatory pressure remains strong. Several of the group's key businesses, from semiconductors to home appliances, remain exposed to political uncertainty in the US, particularly through President Donald Trump's proposal to impose "reciprocal" tariffs across the board from July 9. Washington is also considering revoking certain authorizations that allow foreign chip manufacturers, including Samsung, to access US technology in their factories in China, which would further complicate their operations. Despite these headwinds, Samsung's share price has risen around 19% YTD. However, this gain is lower than the 27.3% recorded by the KOSPI benchmark index, making Samsung the worst performer amongst leading memory manufacturers.

Samsung Elec Q2 profit likely to drop 39% on weak AI chip sales

SEOUL (Reuters) -Samsung Electronics is expected to forecast a 39% plunge in second-quarter operating profit on Tuesday, weighed down by delays in supplying advanced memory chips to artificial intelligence chip leader Nvidia. The world's biggest maker of memory chips is projected to report an April-June operating profit of 6.3 trillion won ($4.62 billion), its lowest income in six quarters and fourth consecutive quarterly decline, according to LSEG SmartEStimate. The prolonged weakness in its financial performance has deepened investor concerns over the South Korean tech giant's ability to catch up with smaller rivals in developing high-bandwidth memory (HBM) chips used in artificial intelligence data centres. Its key rivals, SK Hynix and Micron, have benefited from robust demand for memory chips needed for AI, but Samsung's gains have been subdued as it relies on the China market, where sales of advanced chips have been restricted by the U.S. Its efforts to get the latest version of its HBM chips to Nvidia certified by Nvidia are also moving slowly, analysts said. "HBM revenue likely remained flat in the second quarter, as China sales restrictions persist and Samsung has yet to begin supplying its HBM3E 12-high chips to Nvidia," said Ryu Young-ho, a senior analyst at NH Investment & Securities. He said Samsung's shipments of the new chip to Nvidia are unlikely to be significant this year. Samsung, which expected in March that meaningful progress over its HBM chip could come as early as June, declined to comment on whether its HBM 3E 12-layer chips had passed Nvidia's qualification process. The company, however, has started supplying the chip to AMD, the U.S. firm said in June. Samsung's smartphone sales are likely to remain solid, helped by demand for stock ahead of potential U.S. tariffs on imported smartphones, analysts said. Many of its key businesses including chips, smartphones and home appliances continue to face business uncertainty from various U.S. trade policies including President Donald Trump's proposal for a 25% tariff on non-US-made-smartphones and the July 9 deadline for "reciprocal" tariffs against many of its trading partners. The U.S. is also considering revoking authorisations granted to global chipmakers including Samsung, making it more difficult for them to receive U.S. technology at their plants in China. Shares in Samsung, the worst performing stock among major memory chipmakers this year, have climbed about 19% this year, underperforming a 27.3% rise in the benchmark KOSPI. ($1 = 1,363.3600 won) (Reporting by Heekyong Yang; Editing by Miyoung Kim and Sonali Paul)

Samsung flags big miss in Q2 profit, citing US AI curbs on China

SEOUL (Reuters) -Samsung Electronics on Tuesday projected a 56% drop in second-quarter operating profit from a year earlier, far worse than analysts expected as its struggling chip business faced U.S. chip curbs on China. The world's largest memory chipmaker blamed the profit miss mainly on its Device Solutions (DS) division, which houses its chip business. "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. The memory business took a hit from one-off costs such as inventory value adjustments, though Samsung added that its improved high-bandwidth memory (HBM) products were undergoing customer evaluation and proceeding with shipments. Its artificial intelligence chips business was dogged by delays in the supply of its latest products to Nvidia and continued losses in its contract chip manufacturing business, analysts said. 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 compare with 10.4 trillion won in the same period a year earlier and 6.7 trillion won in the preceding quarter. Revenue would likely fall 0.1% to 74 trillion won from a year earlier, the filing showed. Samsung is expected to release detailed results including a breakdown of earnings for each of its businesses in late July. (Reporting by Heekyong Yang and Joyce Lee; Editing by Chris Reese and Sonali Paul)

Samsung flags big miss in Q2 profit, blames US AI chip curbs on China

SEOUL (Reuters) -Samsung Electronics 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. 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, only saying its improved HBM products were undergoing customer evaluation and proceeding with shipments. Key rivals SK Hynix 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, 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 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 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) (Reporting by Heekyong Yang and Joyce Lee and Hyunjoo Jin; Editing by Chris Reese and Sonali Paul)

Samsung flags big miss in Q2 profit, citing US AI chip curbs on China

SEOUL (Reuters) -Samsung Electronics on Tuesday projected a 56% drop in second-quarter operating profit from a year earlier, far worse than analysts expected as its sales of artificial intelligence chips slowed in the United States and China. The world's largest memory chipmaker blamed the profit miss on U.S. restrictions on advanced AI chips for China, but analysts said the earnings slump was also due to delays in supplying chips to key U.S. customer Nvidia. Samsung said in a statement on Tuesday that its improved high-bandwidth memory (HBM) products were undergoing customer evaluation and proceeding with shipments, without elaborating further. "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. 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. Revenue would likely fall 0.1% to 74 trillion won from a year earlier, the filing showed. The earnings miss will fuel investor doubts about Samsung's fundamentals, although its earnings are expected to recover gradually in the third quarter helped by rising sales of HBM chips to non-Nvidia customers and new phone launches, said Greg Roh, head of research at Hyundai Motor Securities. "The worse-than-expected profit will be negative for investor sentiment," he said. 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. Last year, the U.S. ordered Taiwan Semiconductor Manufacturing Co to halt shipments of advanced chips to Chinese customers that are often used in AI applications, Reuters reported. Samsung said 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 is expected to release detailed results including a breakdown of earnings for each of its businesses in late July. (Reporting by Heekyong Yang and Joyce Lee and Hyunjoo Jin; Editing by Chris Reese and Sonali Paul)

Samsung expects a 56% drop in Q2 operating profit, far short of estimates

SEOUL (Reuters) -Samsung Electronics on Tuesday projected a 56% drop in second-quarter operating profit from a year earlier, missing analysts' estimates by far. Its chip business struggled with weak sales of artificial intelligence chips, dogged by delays in the supply of its latest chips to Nvidia and continued losses in its contract chip manufacturing business, analysts said. The world's largest memory chipmaker estimated an operating profit of 4.6 trillion won for the April-June period, versus a 6.2 trillion won LSEG SmartEstimate. That would compare with 10.4 trillion won in the same period a year earlier and 6.7 trillion won in the preceding quarter. Revenue would likely fall 0.1% to 74 trillion won from a year earlier, the filing showed. Samsung is expected to release detailed results including a breakdown of earnings for each of its businesses in late July. (Reporting by Heekyong Yang and Joyce Lee; Editing by Chris Reese and Sonali Paul)

Samsung Expects Operating Profit to Halve Amid U.S. Trade Curbs on China, AI Chip Supply Delays -- Update

Samsung Electronics expects its second-quarter operating profit to more than halve from a year earlier, a much sharper drop than market consensus, hurt by U.S. trade curbs on China and its delayed sales of advanced artificial-intelligence chips to Nvidia. The South Korean technology giant attributed its downbeat earnings guidance partly to one-off provisional costs to recognize inventory value losses stemming from U.S. export controls limiting the sale of advanced chips to China. The company on Tuesday projected a 56% year-over-year plunge in April-June operating profit to 4.600 trillion won, equivalent to $3.34 billion, missing the 6.359 trillion won consensus estimate of analysts in a FactSet poll. That is its first profit decline since the fourth quarter of 2023, according to Samsung. Quarterly revenue was likely flat at 74.000 trillion won, it said in a preliminary earnings report. The company, which is scheduled to release full quarterly results later this month, didn't provide further earnings details. Samsung has been struggling to catch up with its smaller chip-making rivals, SK Hynix and Micron Technology, which have benefited from brisk shipments of higher-end AI chips. Its shares were 1.1% lower at 61,000 won in early trading, reversing an opening gain after the preliminary earnings report. The stock has risen around 16% year to date, trailing gains by most other major memory-chip makers and underperforming the benchmark Kospi's 28% increase. Analysts have said that Samsung's delayed supply of advanced high-bandwidth-memory products to Nvidia likely continued to weigh on the company's DRAM segment. Samsung said Tuesday that customer evaluations and shipments of its advanced memory chips are proceeding, while operating losses in its nonmemory business, which includes its contract chip-making and logic chip-designing segments, are expected to narrow in the second half of the year due to a gradual recovery in demand. In April, the company said sales of its HBM products could recover from the second quarter. Samsung has yet to confirm shipments of new 12-layer HBM3E products to Nvidia, although it began supplying the chips to Advanced Micro Devices in June. Global chip makers, including Samsung, have been under pressure from U.S. restrictions on the export of advanced chips and chip-making equipment to China. Uncertainty over protectionist U.S. trade policies has added to concerns about Samsung's smartphone business, which was strong enough in the first quarter to offset weakness in its semiconductor segment. President Trump has threatened to impose a new levy on smartphones shipped to the U.S., in addition to higher duties on autos, steel and aluminum imports. On Monday, he said South Korea and other trading partners will face separate "reciprocal tariffs" if they fail to reach trade deals before the new Aug. 1 deadline.

Samsung Flags Operating Profit Plunge Amid U.S. Trade Curbs, AI Chip Delays -- 2nd Update

Samsung Electronics expects its second-quarter operating profit to more than halve from a year earlier, a much sharper drop than market consensus, hurt by U.S. trade curbs on China and delayed sales of advanced artificial-intelligence chips to Nvidia. The South Korean technology giant attributed its downbeat earnings guidance partly to its one-off recognition of inventory value losses stemming from U.S. export controls limiting sales of advanced chips to key-market China. Analysts said some of the weakness was due to a delay in supplying advanced high-bandwidth-memory products to Nvidia, which weighed on the company's DRAM segment. Samsung has been struggling to catch up with smaller chip-making rivals SK Hynix and Micron Technology that have benefited from brisk shipments of higher-end AI chips. The company said Tuesday that customer evaluation and shipments of its advanced memory chips are proceeding, while operating losses in its nonmemory business, which includes its contract chip-making and logic chip-designing segments, are expected to narrow in the second half of the year due to a gradual recovery in demand. In April, the company said sales of its HBM products could recover from the second quarter. Samsung has yet to confirm shipments of new 12-layer HBM3E products to Nvidia, although it began supplying the chips to Advanced Micro Devices in June. Samsung's annual shipments of HBM products will inevitably be reduced in 2025 given the sluggish qualification process, SK Securities analyst Han Dong-hee said. Still, the analyst expects the company to benefit from its eventual entry into the advanced HBM market, persistent demand for AI chips and tight supply-demand conditions for conventional memory chips in the second half. "This is a phase where performance hits its lowest point," Han said. Samsung on Tuesday projected a 56% plunge in April-June operating profit to 4.600 trillion won, equivalent to $3.34 billion, its first profit decline since the fourth quarter of 2023. That missed the 6.359 trillion won consensus forecast of analysts in a FactSet poll. Quarterly revenue was likely flat at 74.000 trillion won, it said in a preliminary earnings report. Its shares fell 0.5% to close at 61,400 won after the guidance update, reversing early gains partly fueled by the company's 3.510 trillion won buyback plan. The stock has risen about 15% year to date, trailing gains by most other major memory-chip makers and underperforming the benchmark Kospi's nearly 30% increase. Global chip makers, including Samsung, have been under pressure from U.S. restrictions on the export of advanced chips and chip-making equipment to China. Uncertainty over protectionist U.S. trade policies has added to concerns about Samsung's smartphone business, which was strong enough in the first quarter to offset weakness in its semiconductor segment. President Trump has threatened to impose a new levy on smartphones shipped to the U.S., in addition to higher duties on auto, steel and aluminum imports. On Monday, he said South Korea and other trading partners will face separate "reciprocal tariffs" if they fail to reach trade deals before the new Aug. 1 deadline. Samsung plans to unveil new Galaxy foldable phones on Wednesday as it continues to enhance its AI-enabled devices to boost sales. It also agreed to acquire Xealth, a U.S.-based healthcare platform, to expand its mobile healthcare-services business.