Samsung Electronics has announced a decline in operating profit for the second quarter of 2025, marking its first decline since 2023.

The company’s operating profit fell 56% year-on-year to 4.6 trillion won (US$3.3 billion), attributed partly to inventory-related costs.

The total revenue for the quarter reached 74 trillion won (US$53.3 billion).

Detailed earnings, including net income and divisional breakdowns, are expected to be released later this month.

Analysts had anticipated a smaller decline of 41% in Samsung’s operating profit.

Samsung has encountered challenges in the high-bandwidth memory (HBM) chip market, which is essential for AI applications.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Geopolitical export controls complicate the memory chip race

Samsung’s struggles with HBM certification coincide with an increasingly complex regulatory environment that affects all major players in the AI chip market.

US semiconductor export controls, which began in 2022 and have expanded since, have created significant market uncertainty and affected revenue streams for many chip companies.

These controls have generated a “chilling effect” on commercial relationships throughout the semiconductor industry, deterring companies from establishing new partnerships even with non-targeted entities 1.

For memory manufacturers like Samsung, navigating these restrictions while trying to secure certification for advanced products like HBM3E adds another layer of complexity to an already challenging technological race.

The export control landscape continues to evolve rapidly, creating a shifting competitive environment that requires constant adaptation 2.

2️⃣ Samsung’s pattern of investing through downturns shows resilience

Samsung’s current HBM certification challenges mirror previous periods where the company faced temporary setbacks before rebounding through strategic investments.