Samsung Electronics is expected to report a 39% year-on-year fall in second-quarter operating profit, as ongoing delays in the supply of advanced memory chips to Nvidia weigh heavily on its performance. According to LSEG SmartEstimate, the South Korean technology conglomerate is projected to post an operating profit of 6.3 trillion won (£3.6 billion) for the April–June period, marking its weakest quarterly result in a year and a half.
The anticipated drop reflects growing investor unease regarding Samsung’s ability to keep pace with rivals in the rapidly expanding market for high-bandwidth memory (HBM) chips, which are crucial for artificial intelligence data centres. While competitors such as SK Hynix and Micron have benefitted from strong demand for AI-optimised memory, Samsung’s progress has been hindered by its dependence on the Chinese market, where access to advanced semiconductor technology remains restricted by U.S. export controls.
Samsung’s efforts to secure certification for its HBM3E 12-layer chips from Nvidia have also been slower than anticipated. Analysts noted that these chips have yet to make meaningful inroads into Nvidia’s supply chain.
“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, Senior Analyst at NH Investment & Securities. He added that shipments to Nvidia are unlikely to be significant within this calendar year.
Although Samsung had initially indicated that progress in HBM development could be expected as early as June, it declined to confirm whether its latest chips had passed Nvidia’s qualification tests. However, AMD disclosed in June that it had commenced receiving shipments of Samsung’s HBM3E chips.
Despite the softness in its semiconductor division, Samsung’s smartphone segment is expected to deliver stable performance, supported by inventory demand ahead of potential U.S. tariffs on imported devices. Broader uncertainty persists, however, across its core businesses—including semiconductors, smartphones, and consumer electronics—due to evolving U.S. trade policies.
The Biden administration is reviewing measures that could revoke export authorisations for chipmakers operating in China, including Samsung, potentially limiting their access to critical U.S. technologies. Additionally, the prospect of a 25% tariff on foreign-manufactured smartphones and a looming 9 July deadline for reciprocal tariffs are contributing to market uncertainty.
While Samsung’s share price has risen approximately 19% year-to-date, it continues to lag behind the broader KOSPI index, which has climbed 27.3% over the same period. The company remains the weakest performer among major memory chipmakers in 2025 thus far.
-Reuters
