Samsung chip arm logs big profit miss in sign of widening crisis
The pivotal unit reported operating profit of 400 billion won (US$288 million) for the June quarter versus analysts' average projection for 2.73 trillion won, hurt by US export controls on high-bandwidth memory chips and losses at its foundry arm.
South Korea's largest company, which gave grim preliminary operating profit and revenue numbers earlier in July, said on Thursday net income came to 4.93 trillion won, missing the analysts' estimate of 6.37 trillion won.
Profit fell after Samsung's foundry arm, which relies in part on Chinese demand, booked a one-time inventory cost as export controls led to unsold AI chips. Usage rates also fell. The profit decline was despite solid demand for high-end memory products for servers, it said.
Operating losses at its foundry unit are expected to narrow in the second half of the year on a gradual recovery in demand, the company said.
A man walks past an ad for the Samsung Galaxy S25 series smartphones at a Samsung store in Seoul on July 8, 2025. Photo: AFP
Samsung's underwhelming quarterly report comes after the company won a US$16.5 billion contract from Tesla to produce AI chips at an upcoming plant in Taylor, Texas. Its stock is up 10 per cent since news about the agreement broke on Monday, bringing Samsung's gains in July to over 20 per cent and putting the stock on track for its best month in more than four years.
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