Samsung Electronics reported its Q2 2025 operating profit dropped by 55%, totaling approximately 4.7 trillion won ($3.4 billion). This marks the weakest quarterly profit in six quarters.
Although overall revenue rose slightly (about 0.7%) to KRW 74.6 trillion ($53.4 billion), the decline was driven by severe issues in its chipmaking business.
🧠 Semiconductor Division Collapse
The Device Solutions (semi/foundry) division posted only KRW 400 billion (~$287 million) in operating profit—a brutal 94% year-on-year decline and its lowest in six quarters.
Key challenges included delays in HBM (high-bandwidth memory) shipments to major clients like Nvidia and one-off costs tied to U.S. export restrictions on AI chip sales to China.
📱 Resilience in Mobile and Device Experience Segments
Samsung’s Mobile eXperience (MX) division—including smartphones, tablets, and wearables—remained a strong performer:
- Profit grew year‑on‑year to KRW 3.1 trillion (~$2.2 billion)
- Led by robust sales of Galaxy S25, Galaxy A-series, tablets, and growth in emerging gadgets like smart rings.
This means the mobile business alone accounted for around 65% of total Q2 profit.
🔭 Outlook and Recovery Strategy
Despite the disappointing results, Samsung expects a gradual turnaround in the second half of 2025:
- Rising demand for AI-driven memory products like HBM3E and next-gen HBM4
- A major $16.5 billion chip supply deal with Tesla, likely to boost foundry revenue by 2026.
- A new U.S.–South Korea trade deal fixing a 15% tariff structure, easing trade uncertainty.
The company also plans to ramp up production at its long-delayed Texas (Taylor) fab, now expected to start operations in 2026, targeting logic and AI chips.
📊 Q2 2025 Financial Snapshot
| Segment | Operating Profit (Q2 2025) | Year‑Over‑Year Change |
|---|---|---|
| Total Operating Profit | KRW 4.7 trillion (~$3.4 B) | –55% |
| Semiconductors (Device Solutions) | KRW 400 billion (~$287 M) | –94% |
| Mobile & Device (MX) | KRW 3.1 trillion (~$2.2 B) | +X% YoY |
| Revenue | KRW 74.6 trillion (~$53.4 B) | +0.7% |
⚠️ Why It Matters
- Samsung’s semiconductor competitiveness has been severely weakened amid geopolitical trade restrictions, giving rivals like SK Hynix and Micron a lead in AI memory demand.
- The dip underscores Samsung’s vulnerability as customers increasingly favor competitors in supplying HBM chips for AI data centers.
- Still, Samsung is making strategic investments and securing major contracts to bounce back in 2026.
- This quarter’s result may pressure Apple, NVIDIA, and mobile OEM partners to diversify chip supply chains.
🔚 Final Take
Samsung’s 55% drop in Q2 profit, especially within its semiconductor business, signals major headwinds from AI memory delays and export restrictions. Yet the strong performance from mobile and ambitious chip partnerships—like with Tesla—offer a path to recovery. Investors and industry watchers will be keeping a close eye as Samsung ramps up production in H2 2025 and into 2026.
