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What simply occurred? Samsung’s chip division has been in hassle for months, however the newest quarterly outcomes affirm the stoop is even deeper than feared. The corporate now faces heavy losses in semiconductors whilst different divisions wrestle to maintain its income afloat.
Samsung Electronics not too long ago posted its second-quarter monetary outcomes, they usually’re worse than anticipated. In line with CBNC, the Korean tech big reported income of 74.6 trillion gained ($53.7 billion US), barely up from 74.07 trillion gained ($53.3 billion) throughout the identical interval final 12 months. Sadly, working income fell sharply to simply ₩4.7 trillion ($3.38 billion), dragged down by a large 93.8 p.c drop in its chip enterprise. Merely put, Samsung’s outcomes underperformed even the corporate’s gloomy forecast from practically a month in the past.
The Gadget Options division, which handles reminiscence chip manufacturing, semiconductor design, and foundry operations, noticed its working earnings practically vanish year-over-year. The chip enterprise posted quarterly working income of solely ₩400 billion ($288 million), down sharply from ₩6.45 trillion ($4.64 billion) a 12 months earlier. Income additionally declined to ₩27.9 trillion ($20 billion) from ₩28.56 trillion ($20.5 billion) in 2024.
Samsung’s CFO Quickly-cheol Park attributed the revenue stoop to a number of elements, together with the impression of Trump-era tariffs and export restrictions on China. Regardless of these challenges, Park forecasts a gradual enchancment within the coming months.
“Regardless of ongoing world financial issues pushed by unsure commerce insurance policies and geopolitical tensions, the IT trade seems poised for a gradual restoration fueled by rising momentum in AI and robotics,” Park mentioned.
Samsung expects a enterprise rebound within the second half of the 12 months, with regular earnings development by 2025. Negotiations between South Korea and the Trump administration helped ease market uncertainties, although Washington should impose extra semiconductor tariffs sooner or later.
The corporate is apprehensive about its struggling foundry division, which Counterpoint Analysis VP Neil Shah calls a “important juncture between survival and profitability.” Samsung’s VP Noh Mi-jung expects foundry income to enhance within the second half of the 12 months, largely due to mass manufacturing of next-generation 2nm chips for cell units.
Samsung not too long ago delayed building of a large new chip plant in Texas after failing to safe a serious buyer. Nonetheless, the corporate landed a profitable contract to fabricate Tesla’s next-generation AI6 chips, providing hope for a turnaround.
Analyst Nam Hyung Kim warned that manufacturing prices on the new Taylor plant will likely be a lot greater than in Korea, so it stays to be seen if the US enterprise will profit Samsung total. The South Korean foundry enterprise additionally faces mounting competitors from market chief TSMC, SK Hynix, and others.
Samsung’s strongest second-quarter efficiency got here from its cell division, which posted working income of three.1 trillion gained, up from 2.23 trillion gained in 2024. The Galaxy S25 and A sequence smartphones, together with Galaxy tablets, noticed “sturdy” gross sales, whereas newly launched foldable telephones ought to maintain off rising competitors from Chinese language manufacturers.