Samsung Electronics has reported an estimated 55.9 percent year-on-year decline in its operating profit for the second quarter of 2025. The company cited a struggling memory chip business and increasing fallout from U.S. trade restrictions as the primary reasons for the sharp downturn, missing market expectations by a significant margin.
According to the earnings guidance released Tuesday, Samsung expects to post an operating profit of 4.59 trillion won (approximately $3.4 billion) for the April–June period. This marks a dramatic drop from the 10.44 trillion won recorded in the same quarter last year. Compared to the first quarter of 2025, the figure also represents a 31.2 percent decline, down from 6.69 trillion won. Revenue was reported at 74 trillion won, showing a marginal year-on-year decrease of 0.1 percent. The net earnings data was not provided.
Falling Short of Expectations
The preliminary operating profit fell 23.4 percent short of analysts’ average estimates, based on a survey by Yonhap Infomax, the financial data arm of Yonhap News Agency. The shortfall highlights the continued weakness in Samsung’s core semiconductor business, despite earlier hopes of a turnaround following a difficult 2024.
Memory Chips and U.S. Trade Policy Weigh Heavily
Samsung attributed the disappointing results to a range of issues, notably the declining performance of its memory division. The company pointed to one-off costs, including provisions related to inventory asset valuation, as well as weaker-than-expected demand for high bandwidth memory (HBM) products. Additionally, the ongoing U.S. restrictions on exporting advanced AI chips to China have further disrupted global semiconductor supply chains and dampened demand in one of Samsung’s key markets.
Reports also emerged that Samsung’s HBM chips failed to meet the quality standards required by U.S. chipmaker Nvidia. While the company did not confirm the specifics of the test results, it stated that upgraded HBM products are currently being evaluated and shipped to customers.
Broader Business Challenges
Beyond the semiconductor segment, Samsung’s mobile division—despite the launch of its flagship Galaxy S series earlier this year—contributed little to the second-quarter performance. In contrast to the first quarter, which saw a year-on-year sales increase driven by smartphone demand, the second quarter lacked a major product release to lift profits.
Meanwhile, its conventional TV and home appliance units also faced profitability pressures, exacerbated by U.S. tariffs and weaker consumer sentiment in key overseas markets. Samsung did not release detailed breakdowns for each business unit, but industry analysts estimate that its semiconductor division may have posted an operating profit of around 1 trillion won in the first quarter.
Outlook: Hopes for a Gradual Recovery
Despite the underwhelming second-quarter performance, industry analysts remain cautiously optimistic. Many believe that the worst may be over for Samsung, with expectations of a rebound in the third quarter. This outlook is largely based on a forecasted recovery in memory chip prices and improved performance from upgraded HBM products.
Roh Geun-chang, chief researcher at Hyundai Motor Securities, said that Samsung’s profit performance seems to have bottomed out in the second quarter and is likely to improve going forward. The company also hinted at reduced losses in its foundry and non-memory segments, as utilization rates begin to rise on the back of stronger demand.
Final Report Coming Soon
Samsung is expected to release its full and detailed earnings report later this month. The final data will provide a clearer picture of how each of its core divisions performed during the quarter and what investors can expect for the remainder of the year.
