Samsung’s Q2 Profit Expected to Drop 39% as AI Chip Shipments to Nvidia Lag
Synopsis
Samsung Electronics is expected to report a 39% drop in second-quarter opening profit on Tuesday, as delays in delivering advanced memory chips to Nvidia hurt their performance. Analysts say that April-June profits will be…
Samsung Electronics is expected to report a 39% drop in second-quarter opening profit on Tuesday, as delays in delivering advanced memory chips to Nvidia hurt their performance. Analysts say that April-June profits will be around $4.62 billion, marking the company's lowest earnings in six quarters and its fourth quarterly decline.
The South Korean tech company has struggled to keep up with its rival companies in the booming high-bandwidth (HBM) chip market, with the memory chip market, which covers AI data centers. While those companies have benefited from strong global demand, Samsung's reliance on the Chinese market, which is set by US ship restrictions, has slowed its business.
AI Progress Lags Behind Arrivals
Samsung’s latest HBM chip, the HBM3E 12-high, is yet to be approved by Nvidia, slowing its entry into a key AI supply chain. According to some analysts, revenue from Samsung’s HBM segment likely remained flat in Q2. The company expected some meaningful progress or HBM certification by June but still has not been confirmed if it met that goal. However, AMD confirmed that it has started receiving Samsung’s chips.
Trade Policy Concerns Add More Pressure to the Business
Beyond the AI chip delays, Samsung faces a lot of uncertainty from the US trade policy. The company could be impacted by a proposed 25% tariff on smartphones that are not made in the U.S., a policy pushed by President Donald Trump. Samsung smartphone sales may temporarily benefit as customers stock up the supplies as potential tariffs come into the market, but long-term business remains very risky.
Additionally, Washington is considering revoking the export license that allows companies like Samsung to get US technology in their China-based factories, a move that could disrupt its global supply chain.
Despite these, Samsung shares have gained 19% percent this year. However, the company is trailing behind a lot of its competitors and it continues to underperform South Korea’s benchmark index, which is utpo 27.3% year to date.
Stay informed. Stay inspired. Subscribe to Inspirepreneur Magazine’s Newsletter for the latest developments on global conflicts, leadership insights, and strategic innovations shaping tomorrow’s world.
At Inspirepreneurs Magazine, covering entrepreneurship, business failures, and the human stories behind the world's most ambitious founders. She writes at the intersection of strategy and storytelling.
You Might Also Like
Nepal Lifts Social Media Ban After Deadly Protests
Amazon to offer Lilly weight-loss pill via kiosks, expands same-day delivery push
