Inventory losses, delayed Nvidia orders, and US tariffs drag earnings to lowest Q2 profit in two years, but recovery expected in H2 with AMD orders and new chip supply.
Seoul, July 8, 2025:
Samsung Electronics reported a 56% year-on-year drop in its Q2 operating profit, as chip delays and macroeconomic challenges battered the tech giant’s financial performance. The company posted an operating profit of 4.6 trillion won ($3.4 billion) for the April–June quarter — sharply below the market consensus of 6.7 trillion won, according to data from Yonhap Infomax.
This marks the lowest second-quarter profit in two years, and the first time Samsung’s quarterly profit has dipped below 5 trillion won since Q4 2023.
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Chips Fail to Deliver
The main culprit: Samsung’s sluggish semiconductor division, which continues to suffer from delayed deliveries of its high bandwidth memory (HBM) chips to Nvidia, the world’s leading AI chipmaker.
The company cited a large one-off inventory loss reserve within its Device Solutions (DS) division, which oversees chip production, as the key reason for the disappointing figures. Market analysts predict the DS division’s operating profit will come in below 2 trillion won.
To add to its woes, Samsung has yet to pass Nvidia’s quality tests for its latest HBM chips, although it has successfully shipped to AMD and other clients.
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Export Value Hit by Stronger Won and US Tariffs
Further compounding losses was the appreciation of the Korean won, which jumped from 1,457.92 per dollar in March to 1,365.15 in June, eroding Samsung’s export competitiveness. New US tariffs, announced recently, also weighed heavily on the tech major’s overseas shipments.
Sales Stagnate Across Segments
Overall sales stood at 74 trillion won, down 0.1% year-on-year and 6.5% sequentially. Samsung’s smartphone sales plateaued after the early-year release of its Galaxy S25, while TV sales remained flat amid weak consumer demand.
Samsung did not disclose a divisional breakdown, but multiple brokerages flagged muted performance in most consumer electronics segments.
Signs of Hope in Second Half
Despite a rocky second quarter, Samsung remains optimistic about a recovery in H2. It expects improved earnings from:
- Ongoing HBM quality testing with new clients
- 12-layer HBM3E chip shipments to AMD
- New foundry contracts
- Better cost efficiency and utilization rates
“Samsung’s operating profit is expected to recover gradually after bottoming out in the second quarter,” said Roh Geun-chang, head of research at Hyundai Motor Securities. “The losses are expected to narrow in Q3 with rising HBM sales and improved margins.”
Shares of Samsung Electronics traded 0.2% higher at 61,850 won in early trading on Tuesday, indicating cautious investor optimism despite weak results.
Tags:
Samsung Q2 Results, Samsung Operating Profit 2025, Semiconductor Business, Nvidia HBM Chips, AMD Chip Supply, Korean Won, US Tariffs, Samsung Memory Division, Galaxy S25 Sales, Samsung HBM3E, Yonhap Infomax