South Korea-based Samsung Electronics reported that its Q2 2025 operating profit is expected to decline by 56% year-over-year due to challenges in its chip and foundry segments, delayed AI chip certification, and subdued demand. Despite ongoing efforts to supply HBM chips for AI processors, delays with Nvidia’s qualification continue to weigh heavily on performance.
Samsung Electronics Co., Ltd., a global leader in memory chips and smartphones headquartered in Suwon, Gyeonggi Province, South Korea, has announced a significant decline in its Q2 2025 operating profit. The company expects to post an operating profit of approximately 4.6 trillion won (USD 3.36 billion), a 56% decrease compared to the 10.44 trillion won reported in Q2 2024.
This projection falls well short of LSEG SmartEstimate’s forecast of 6.26 trillion won (USD 4.57 billion). Revenue for the quarter is expected to hit 74 trillion won, also below LSEG’s estimate of 75.55 trillion won.
In a regulatory filing, Samsung Electronics, which is one of the world’s largest semiconductor manufacturers, attributed the decline to ongoing inventory value adjustments and the impact of U.S. restrictions on the export of advanced AI chips to China. The company also faces increasing competition in the high-bandwidth memory (HBM) segment—critical for AI processing—from rivals SK Hynix and Micron.
Samsung has been working to get the latest version of its HBM chips certified by AI chip leader Nvidia, which currently dominates approximately 70% of global HBM demand. However, recent reports suggest the certification may not be completed until at least September, limiting Samsung’s short-term growth potential in the AI space.
Although Samsung has reportedly secured HBM supply deals with AMD, the timing of production ramps means those contributions are unlikely to reflect in Q2 results.
Further compounding its challenges, the company’s chip foundry business continues to experience sluggish order volumes and heightened competition from Taiwan Semiconductor Manufacturing Company (TSMC).
In September last year, Reuters reported that Samsung directed its global subsidiaries to reduce staff in certain divisions by 30%, signaling deeper restructuring efforts.
Despite current pressures, Samsung Electronics’ stock has climbed over 16% year-to-date, according to LSEG data. The company plans to release its detailed Q2 financial results later this month.