Samsung Profit Hit by AI Chip Delays and US Restrictions

Samsung Electronics on Tuesday, 08-07-2025 estimated a 56% drop in second-quarter operating profit due to US limits on exports of advanced AI chip technology to China and the slowing of deliveries to major buyers such as Nvidia. The world's biggest memory chip manufacturer put its Q2 operating profit at 4.6 trillion won (US$3.3 billion), down dramatically from 10.4 trillion won in the same period last year and below expectations of 6.2 trillion won, said LSEG SmartEstimate.

"The DS Division posted a quarter-on-quarter drop in profit owing to adjustments in inventory values and the effect of U.S. limits on advanced AI chips for China," Samsung stated. The April–June figure is Samsung's weakest quarterly profit in six quarters.

Key Highlights-

• Samsung Q2 profit drops 56 percent year on year to 4 point 6 trillion won
• US export restrictions and Nvidia supply delays hit chip sales
• Company expects recovery in H2 with HBM chip demand and new launches

Revenue is forecast at 74 trillion won, falling 0.1% from a year earlier. While the company stated that it has its enhanced high-bandwidth memory (HBM) products under customer review and shipment, it would not elaborate.

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Analysts blamed the weak performance on U.S. restrictions as well as postponed shipments to Nvidia. "The worse-than-expected profit will be detrimental to investor sentiment," said Greg Roh, head of research of  Hyundai Motor Securities. Yet, he added Samsung's earnings would rebound in Q3 with increased HBM chip sales to non-Nvidia customers and new launches of smartphones.

Samsung also posted ongoing losses in its foundry business, battered by poor utilisation and export curbs. The company is hopeful that operating losses will improve in the second half of 2025 as demand picks up gradually.