Samsung Electronics Faces Sharp Profit Decline on Delayed AI Chip Shipments

Samsung Electronics Co. Ltd. (005930.KS) is projected to post a steep decline in second-quarter earnings this week as the world’s largest memory chipmaker struggles to ramp up shipments of high-bandwidth memory (HBM) chips for artificial intelligence applications. Analysts surveyed by LSEG SmartEstimate forecast that Samsung’s operating profit for the April–June period will fall 39% year-on-year to approximately 6.3 trillion won ($4.62 billion), marking its weakest quarterly profit in a year and a half (LSEG SmartEstimate, July 2025).

The company’s sluggish progress in delivering its latest HBM chips to Nvidia Corp. (NVDA.O) — a leader in AI semiconductors — has left it trailing smaller rivals. SK Hynix (000660.KS) and Micron Technology (MU.O) have capitalized on surging global demand for AI-driven memory solutions, while Samsung’s heavy reliance on the Chinese market — where advanced chip sales face U.S. export restrictions — has limited its upside.

Despite announcing in March that it expected to ramp up meaningful shipments of its HBM3E 12-high chips by mid-year, Samsung has yet to confirm whether its new chips have cleared Nvidia’s qualification process. NH Investment & Securities analyst Ryu Young-ho noted that “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” (NH Investment & Securities, July 2025). He added that shipments to Nvidia this year are likely to remain insignificant.

Samsung has, however, begun supplying its next-generation HBM3E chips to AMD, according to a June statement by the U.S. chipmaker.

Meanwhile, Samsung’s smartphone division has shown more resilience, partly due to inventory buildup ahead of possible new tariffs on imported handsets in the U.S. Analysts say demand remains steady, but the company still faces broad uncertainty across its key businesses — from semiconductors to mobile devices and consumer electronics — amid shifting U.S. trade policies.

Proposals such as a potential 25% tariff on non-U.S.-made smartphones, plus possible revocation of export authorizations that would limit Samsung’s access to American chipmaking technology in China, have kept investors cautious.

So far in 2025, Samsung’s share price has climbed roughly 19%, underperforming the broader KOSPI Index (.KS11), which has gained 27.3% over the same period (Refinitiv, July 2025). As of Monday morning in Seoul, Samsung shares were down 1.9% compared to a modest 0.3% uptick in the KOSPI.

Samsung is scheduled to release its detailed quarterly forecast on Tuesday.