Samsung memory profits drop due to AI chip export ban to China

Samsung Electronics reported a decline in memory chip profits for the first quarter of 2025.

This drop was influenced by the US ban on exporting high-bandwidth memory (HBM) for AI accelerators to China.

Despite this decline, gains in its consumer electronics segment limited overall operating profit growth to 1.2% year-on-year.

The company announced an operating profit of 6.7 trillion won (US$4.7 billion) for the first quarter.

Revenue rose 10.05% year-on-year to 79.14 trillion won (US$55.5 billion), marking its highest quarterly revenue to date.

The company faces risks from geopolitical tensions and export controls, with concerns about second-quarter demand and the potential impact of US tariffs on its operations.

🔗 Source: The Korea Times

🧠 Food for thought

1️⃣ Export controls reflect cyclical semiconductor geopolitics with historical parallels

Samsung’s current struggles with HBM export restrictions echo earlier US actions against Japanese chipmakers in the 1980s.

In that era, US policymakers viewed Japanese semiconductor firms, especially Toshiba, as threats to American technological dominance, resulting in sanctions that impacted Toshiba’s revenue and market position 1.

These sanctions contributed to the decline of Japan’s semiconductor industry, as US tariffs forced Japanese firms to open their markets to American companies, curtailing their global growth 1.

Today’s restrictions on high-bandwidth memory exports to China follow this established pattern of using export controls as strategic tools to maintain US technological leadership and limit competitor nations’ advancement in critical technologies.

The semiconductor industry has consistently experienced these geopolitical interventions, creating shifts in market leadership that reshape global supply chains and competitive dynamics.

2️⃣ Export restrictions accelerate supply chain restructuring and regional manufacturing shifts

The US ban on HBM exports to China is forcing major semiconductor companies to reconfigure their global operations and supply chains.