Samsung Predicts Substantial Q2 2025 Profit Decline Amid Trade Challenges

2025-07-08 companies

Seoul, Tuesday, 8 July 2025.
Samsung Electronics projects a significant 56% drop in Q2 operating profit, citing weak AI chip sales and U.S. trade restrictions impacting its semiconductor sector.

Impact of U.S. Trade Restrictions on Samsung’s Profits

Samsung Electronics (005930.KS) recently announced a projected 56% decline in operating profits for the second quarter of 2025, estimating an operating profit of approximately 4.6 trillion Korean won. This significant downturn, compared to the 10.44 trillion won recorded in the same period the previous year, is attributed primarily to weakened AI chip sales and stringent U.S. export controls on AI technologies to China, which have exacerbated challenges within its semiconductor division [1][2][3].

Market Reactions and Future Outlook

Following the earnings guidance release on July 8, 2025, Samsung’s stock experienced a drop of 0.2% amid broader market concerns regarding its performance. Investors remain wary given the estimated operating profit falls short of analysts’ expectations of 6.2 trillion won [2][4]. Despite the challenges, Samsung is looking to mitigate its operating losses by focusing on demand recovery and expanding its high-bandwidth memory (HBM) chip business [4][5].

Strategic Adjustments in a Challenging Climate

The semiconductor giant is grappling with competition from other market players such as SK Hynix and Micron, amid delays in supplying HBM chips to major clients like Nvidia. Analysts like Ryu Young-ho from NH Investment & Securities emphasize that regaining market competitiveness will be crucial for Samsung [2][6]. The company plans to address operational efficiencies and improve product offerings as it anticipates stronger demand in the latter part of the year [3][5].

Earnings Call and Future Projections

Samsung Electronics is scheduled to release detailed earnings results on July 31, 2025. During this call, the company is expected to discuss strategic initiatives to revitalize its semiconductor operations and address the anticipated recovery of its non-memory business amid gradually improving market conditions [3][7]. With a focus on backward integration and potential new smartphone launches, Samsung remains cautiously optimistic about the coming quarters [6].

Sources

earnings guidance Samsung Electronics