Samsung Electronics is expected to post a 39% year-over-year drop in second-quarter operating profit, dragged down by delays in qualifying its advanced memory chips for use in Nvidia\u2019s AI systems. According to LSEG SmartEStimate, Samsung will likely report 6.3 trillion won ($4.62 billion) in operating profit for the April-June period, marking its lowest result in six quarters.<\/p>\n\n\n\n
The disappointing performance comes amid growing concern over Samsung\u2019s ability to compete with smaller rivals like SK Hynix and Micron in the high-bandwidth memory (HBM) market, which is crucial for powering AI data centers. While competitors have seen revenue boosts from strong AI-related demand, Samsung\u2019s progress has stalled due to slower HBM development and U.S. restrictions on sales to China.<\/p>\n\n\n\n
Samsung\u2019s HBM revenue has likely remained flat this quarter, according to analysts, as its flagship HBM3E 12-high chip still hasn\u2019t been certified by Nvidia. Ryu Young-ho of NH Investment & Securities noted that significant shipments to Nvidia are unlikely in 2024. Samsung had previously forecasted a breakthrough by June, but no confirmation has been provided.<\/p>\n\n\n\n
Despite setbacks with Nvidia, Samsung began supplying its HBM chips to AMD in June. Still, analysts view the Nvidia delay as a missed opportunity during a crucial phase in the AI chip race. Samsung declined to comment on the status of the qualification process for its 12-layer HBM 3E chips.<\/p>\n\n\n\n
On the consumer side, smartphone sales remained solid this quarter, bolstered by inventory buildup ahead of possible U.S. tariffs on imported devices. However, Samsung continues to face broader uncertainty across its business lines, including potential restrictions on U.S. technology access in China and new reciprocal tariffs proposed by President Donald Trump.<\/p>\n\n\n\n
These policy risks, particularly around chip exports and supply chain dependencies, have cast a shadow over Samsung\u2019s long-term outlook. The company\u2019s smartphone, home appliance, and semiconductor divisions all remain exposed to fluctuating trade conditions and regulatory changes.<\/p>\n\n\n\n
Samsung shares have risen about 19% in 2024, lagging behind the KOSPI\u2019s 27.3% gain and underperforming other memory chipmakers. On Monday, Samsung stock traded down 1.9% as of 0447 GMT, while the broader KOSPI index edged up 0.3%.<\/p>\n\n\n\n
The pressure is mounting for the tech giant to accelerate HBM development and secure its position in the rapidly evolving AI hardware market. Without significant traction in supplying next-gen memory chips to AI leaders like Nvidia, Samsung risks ceding ground to its more agile competitors.<\/p>\n","protected":false},"excerpt":{"rendered":"