Samsung signage in the course of the Nvidia GPU Expertise Convention (GTC) in San Jose, California, US, on Thursday, March 20, 2025.
David Paul Morris | Bloomberg | Getty Pictures
South Korea’s Samsung Electronics on Tuesday forecast a 56% fall in income 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 received, down from 10.44 trillion Korean received 12 months over 12 months.
The determine is a deeper plunge in comparison with SmartEstimate from LSEG, which is weighted towards forecasts from analysts who’re extra persistently correct.
Based on LSEG SmartEstimate, Samsung was anticipated to put up an working revenue of 6.26 trillion received ($4.57 billion) for the quarter. In the meantime, Samsung projected its income to hit 74 trillion received, falling wanting the LSEG SmartEstimate of 75.55 trillion received.
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 units comparable to laptops and servers.
The corporate stated in an announcement that stock worth changes and the impression of U.S. restrictions on superior AI chips for China had contributed to the decline in income.
The corporate has additionally been falling behind rivals like SK Hynix and Micron in high-bandwidth reminiscence chips — a sophisticated sort of reminiscence that’s being deployed in AI chips.
“The disappointing earnings are as a result 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, stated concerning the earnings steering.
SK Hynix, the chief in HBM, has secured a place as Nvidia’s key provider. Whereas Samsung has reportedly been working to get the most recent model of its HBM chips licensed by Nvidia, a report from a native outlet suggests these plans have been pushed again to at the very least September.
The corporate declined to touch upon the standing of its offers with Nvidia, however stated that improved HBM merchandise are continuing with buyer analysis and shipments.
Ray Wang, analysis director of semiconductors, provide chain and rising know-how at Futurum Group informed CNBC that it’s clear that Samsung has but to cross Nvidia’s qualification for its most superior HBM.
“Provided that Nvidia accounts for roughly 70% of world HBM demand, the delay meaningfully caps near-term upside,” Wang stated. 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 because of the timing of manufacturing ramps.
In the meantime, Samsung’s chip foundry enterprise continues to face weak orders and severe competitors from Taiwan Semiconductor Manufacturing Firm, Wang added.
Reuters reported in September that Samsung had instructed its subsidiaries worldwide to chop 30% of workers in some divisions, citing sources conversant in the matter.
Samsung Electronics’ inventory is up over 16% year-to-date, in response to LSEG information. The corporate will launch its detailed third-quarter outcomes in the direction of the top of this month.
