Samsung's profits collapse 56% - AI chips and competitors to blame
Samsung Electronics reported the first drop in profits since 2023: at the end of the second quarter of 2025, operating profit fell by 56%. The reasons - problems with the release of advanced AI-chips and increased competition from SK Hynix.
Here's What We Know
Samsung itself estimated revenue for the quarter at ₩74 trillion (about $53 billion), up 23% year-on-year. But operating profit plummeted: expected ₩6.5 trillion, it got ₩4.6 trillion (about $3.3 billion) - worse than analysts' forecast by 29%.
The main reasons:
- Slippage with HBM chips for AI. The South Korean giant failed to manage HBM3E memory certification for Nvidia, opening the way for competitors. SK Hynix has confidently occupied the niche of memory supplier for top GPUs.
- Semiconductor costs. Samsung's Foundry business is still in the negative: low plant utilisation and investments in EUV production do not pay off.
- Export restrictions to China. The US continues to pressure AI chip shipments, which is limiting the market and hitting order volumes.
What Samsung says
The company admitted that the memory segment, despite growing demand for AI, is suffering from "validation delays" and a time lag in the quality of HBM products. That said, Samsung promises to make up for it - HBM3E memory is expected to pass certification in the second half of the year, and shipments to major customers such as AMD and Nvidia will begin in full.
What's next
The company is betting on the second half of the year: growth from new chip sales and getting back in the game with HBM3E is expected. Competition with SK Hynix is a key risk. While Hynix dominates the AI processing memory segment, Samsung has to catch up.
Source: Bloomberg
