Struggles with Nvidia certification and U.S. trade tensions weigh on semiconductor business
New Delhi: Samsung Electronics is expected to report a significant decline in its second-quarter operating profit, with earnings projected to drop 39% year-on-year due to delays in supplying advanced memory chips used in artificial intelligence applications.
The South Korean tech giant is likely to post an operating profit of 6.3 trillion won (\$4.62 billion) for the April-June period, down from 10.4 trillion won a year ago. This would mark its lowest quarterly profit in a year and a half, reflecting continued struggles in the competitive AI chip segment.
Samsung has been facing difficulties in keeping pace with rivals in the high-bandwidth memory (HBM) chip market, which is critical for AI data centers. While competitors such as SK Hynix and Micron have seen strong momentum from growing AI demand, Samsung’s gains have been limited, largely due to its reliance on the Chinese market where restrictions on advanced chip exports have been tightened by the U.S.
In particular, Samsung’s attempts to supply its latest HBM3E 12-layer chips to leading AI chipmaker Nvidia have reportedly faced delays in the qualification process. Although Samsung had anticipated meaningful progress by mid-year, it has yet to confirm whether its chips have passed certification. However, the company has recently begun supplying the same chips to U.S.-based AMD, indicating some movement in its AI ambitions.
Despite sluggish progress in its semiconductor division, Samsung’s smartphone business remains relatively resilient. Analysts believe that steady demand—partly driven by stockpiling ahead of potential new U.S. tariffs on imported smartphones—has helped maintain stability in this segment.
Nevertheless, broader uncertainty stemming from U.S. trade policy continues to cast a shadow over Samsung’s operations. Proposed tariffs on foreign-made smartphones and the looming deadline for reciprocal tariffs on key trading partners could disrupt multiple business lines, from semiconductors to consumer electronics. In addition, potential revocation of U.S. technology licenses could further complicate operations at Samsung’s manufacturing facilities in China.
Year-to-date, Samsung’s stock has underperformed in comparison to its peers, gaining about 19%, while the broader KOSPI index has risen more than 27%. As of Monday morning, shares in Samsung Electronics were down nearly 2%, lagging behind a modest uptick in the overall market.
The company is scheduled to release its official second-quarter earnings guidance on Tuesday.
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