Samsung signage in the course of the Nvidia GPU Know-how Convention (GTC) in San Jose, California, US, on Thursday, March 20, 2025.
David Paul Morris | Bloomberg | Getty Photos
South Korea’s Samsung Electronics on Tuesday forecast a 56% fall in earnings for the second quarter as the corporate struggles to seize demand from synthetic intelligence chip chief Nvidia.
The reminiscence chip and smartphone maker projected working revenue for the quarter ending June to be round 4.6 trillion gained, down from 10.44 trillion Korean gained yr over yr.
The determine is a deeper plunge in comparison with SmartEstimate from LSEG, which is weighted towards forecasts from analysts who’re extra constantly correct.
In line with LSEG SmartEstimate, Samsung was anticipated to put up an working revenue of 6.26 trillion gained ($4.57 billion) for the quarter. In the meantime, Samsung projected its income to hit 74 trillion gained, falling wanting the LSEG SmartEstimate of 75.55 trillion gained.
Shares of Samsung Electronics fell as a lot as 1.13% in early uneven commerce Tuesday following the discharge of the incomes estimates.
Samsung is a number one participant within the international smartphone market and in addition one of many world’s largest makers of reminiscence chips, that are utilized in gadgets similar to laptops and servers.
The corporate mentioned in a press release that stock worth changes and the influence of U.S. restrictions on superior AI chips for China had contributed to the decline in earnings.
The corporate has additionally been falling behind opponents like SK Hynix and Micron in high-bandwidth reminiscence chips — a complicated kind of reminiscence that’s being deployed in AI chips.
“The disappointing earnings are as a consequence of ongoing working losses within the foundry enterprise, whereas the upside within the high-margin HBM enterprise stays muted this quarter,” MS Hwang, analysis director at Counterpoint Analysis, mentioned in regards to the earnings steerage.
SK Hynix, the chief in HBM, has secured a place as Nvidia’s key provider. Whereas Samsung has reportedly been working to get the newest model of its HBM chips licensed by Nvidia, a report from a native outlet suggests these plans have been pushed again to at the least September.
The corporate declined to touch upon the standing of its offers with Nvidia, however mentioned that improved HBM merchandise are continuing with buyer analysis and shipments.
Ray Wang, analysis director of semiconductors, provide chain and rising expertise at Futurum Group instructed CNBC that it’s clear that Samsung has but to go Nvidia’s qualification for its most superior HBM.
“On condition that Nvidia accounts for roughly 70% of world HBM demand, the delay meaningfully caps near-term upside,” Wang mentioned. He famous that whereas Samsung has secured some HBM provide for AI processors from AMD, this win is unlikely to contribute to second-quarter outcomes as a result of timing of manufacturing ramps.
In the meantime, Samsung’s chip foundry enterprise continues to face weak orders and critical competitors from Taiwan Semiconductor Manufacturing Firm, Wang added.
Reuters reported in September that Samsung had instructed its subsidiaries worldwide to chop 30% of employees in some divisions, citing sources acquainted with the matter.
Samsung Electronics’ inventory is up over 16% year-to-date, based on LSEG knowledge. The corporate will launch its detailed third-quarter outcomes in the direction of the tip of this month.
