Samsung Electronics anticipates a 39% drop in Q2 operating profit, potentially hitting a six-quarter low. This downturn stems from delays in supplying advanced High Bandwidth Memory (HBM) chips to Nvidia, a leader in AI chip technology. While Samsung has been working to get its HBM3E chips certified by Nvidia, it has faced setbacks, allowing competitors like SK Hynix and Micron to gain ground in the AI memory market.
Despite efforts to address these challenges through organisational restructuring and increased R&D investment, Samsung's semiconductor division is expected to report a decline in operating profit. The company has begun supplying its HBM3E chips to AMD, but this has not been enough to offset the Nvidia-related delays. Broader economic factors, including potential US tariffs and rising logistics costs, also contribute to the anticipated profit decline.
Analysts suggest Samsung's earnings may rebound in the second half of the year, driven by new smartphone releases and the start of mass production of advanced DRAM. However, the company's ability to regain its position in the semiconductor industry hinges on resolving the AI chip supply issues and navigating ongoing trade tensions.
