Samsung Electronics Q2 Profit Plunges 55% Amid Memory Chip Delays, U.S. Export Curbs

Samsung Electronics posted a 55% drop in second-quarter operating profit as delays in high-bandwidth memory (HBM) chip shipments and U.S. export restrictions on advanced semiconductor sales to China continued to weigh on its core chip business.

The world’s largest memory chip maker reported operating profit of 4.7 trillion won ($3.37 billion) for April–June, nearly matching its earlier estimate of 4.6 trillion won, which had already fallen short of market expectations. Revenue edged up 0.7% year-on-year to 74.6 trillion won, in line with its preliminary forecast.

The ongoing slump underscores growing investor concerns about Samsung’s competitiveness in next-generation HBM chips, crucial for artificial intelligence data centers and used by major clients like Nvidia (NASDAQ: NVDA). The company faces intensifying competition from smaller rivals that have gained traction in the AI-driven semiconductor market.

Adding a potential boost, Tesla (NASDAQ: TSLA) recently announced a $16.5 billion agreement to source chips from Samsung, a deal that could strengthen the South Korean giant’s foundry business, which manufactures semiconductors on contract.

Despite the revenue uptick, prolonged weakness in profitability highlights the challenges Samsung faces in regaining momentum in the rapidly evolving AI and semiconductor sectors. Industry analysts say its ability to accelerate HBM production and navigate U.S.-China export tensions will be key to reclaiming market leadership in the coming quarters.

Samsung’s performance is closely watched as a bellwether for global tech demand, particularly as AI-driven chip competition intensifies across the industry. Investors remain cautious but hopeful the Tesla partnership and potential recovery in chip demand could mark a turning point later this year.