samsung's profit plunges 39% amid nvidia chip delays

2025-07-07 nvidia

seoul, Monday, 7 July 2025.
samsung electronics is bracing for a significant downturn. The tech giant anticipates a 39% drop in second-quarter operating profit. A critical factor is the delay in supplying advanced memory chips to nvidia. This shortfall underscores the intense competition in the ai chip market. The projected operating profit for april to june is 6.3 trillion won ($4.62 billion), marking the lowest level in six quarters. samsung’s struggle to keep pace with competitors in developing high-bandwidth memory chips for ai data centers is a growing concern for investors.

nvidia’s hbm advantage

Samsung’s inability to promptly supply its HBM3E 12-high chips to Nvidia has implications for Nvidia’s competitive edge [1]. Ryu Young-ho, a senior analyst at NH Investment & Securities, indicated that Samsung’s HBM revenue likely remained flat in the second quarter [1]. Restrictions on sales to China and the delay in supplying the 12-layer HBM3E chips to Nvidia contributed to this stagnation [1][2]. Samsung had anticipated making significant progress with its HBM chips as early as June, but has not confirmed whether its HBM 3E 12-layer chips have passed Nvidia’s qualification process [1].

market competition and stock performance

Samsung’s stock performance has been lackluster compared to its competitors [2][6]. While Samsung’s stock has increased by approximately 19% this year, it underperforms the Korea Composite Stock Price Index, which has risen by about 27% [2][6]. This lag reflects concerns about Samsung’s competitiveness in the high-bandwidth memory (HBM) chip market [2]. Rivals like SK Hynix and Micron have capitalized on the robust demand for AI memory chips, while Samsung’s growth has been limited due to its reliance on the Chinese market and restrictions on advanced chip sales [2][6].

trade policy and uncertainty

The broader business environment for Samsung remains uncertain due to potential trade policy shifts [1][6]. Proposed tariffs on non-U.S.-made smartphones and potential reciprocal tariffs add to the financial risks [1][6]. The U.S. government is also considering revoking authorizations that would make it more difficult for global chipmakers, including Samsung, to access U.S. technology for their factories in China [1][6]. These factors collectively contribute to the challenges Samsung faces in maintaining its market position and revenue streams [1].

samsung’s response and future outlook

Despite current setbacks, Samsung is actively pursuing strategies to regain momentum in the HBM market [6]. The company has begun supplying its HBM3E chips to AMD [1][2]. Samsung aims to accelerate negotiations with Nvidia regarding its 12-layer fifth-generation HBM3E chips and plans to commence mass production of its sixth-generation HBM4 chips later this year [6]. Furthermore, Samsung is intensifying efforts to commercialize its 2-nanometer node chip production by the end of the year, indicating a commitment to technological advancement and market leadership [6].

Bronnen

ai chips samsung earnings