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Business Standard
08-07-2025
- Business
- Business Standard
Samsung's profit halves, falls 1st time since 2023 on chip business crisis
The disappointing results underscore how South Korea's largest company has ceded leadership in the AI market to SK Hynix Inc. in the post-ChatGPT infrastructure boom Bloomberg By Yoolim Lee Samsung Electronics Co.'s profit fell for the first time since 2023, reflecting the deepening market share losses clouding the memory chipmaker's prospects in the AI era. The company reported a sharper-than-anticipated 56 per cent plummet in operating income for the June quarter, which it blamed on inventory writedowns following US curbs on Chinese-bound AI chips. Its shares swung between gains and losses in Seoul Tuesday after the company announced a 3.9 trillion won stock buyback. The disappointing results underscore how South Korea's largest company has ceded leadership in the AI market to SK Hynix Inc. in the post-ChatGPT infrastructure boom. Its longstanding rival — along with Micron Technology Inc. — now sells more of the cutting-edge high-bandwidth memory chips paired with Nvidia Corp.'s AI accelerators. Compounding the problem, US restrictions on tech exports to China are hindering a turnaround in its loss-making contract chipmaking operation. Still, some investors expect the chips-to-smartphone company to have hit bottom over the summer. Nvidia is shifting toward a new generation of memory chips, offering Samsung an opening. The one-time inventory adjustment suggests it wants to start the second half with a clean slate, said Sanjeev Rana, head of research at CLSA Securities Korea. 'This is likely to be the bottom,' he said. 'Looking beyond the disappointing results in the second quarter, we expect a sequential recovery.' The company reported a preliminary operating profit of 4.6 trillion won ($3.3 billion) in the June quarter — the company's lowest since 2023 and short of analysts' projections. Revenue was flat at 74 trillion won. The company will provide a full financial statement with net income and divisional breakdowns later this month. Profit fell after Samsung's foundry arm, which has relied in part on Chinese demand, booked a one-time inventory cost on unsold AI chips. Usage rates also fell, the company said in an unusual statement issued to explain the worse-than-expected performance. Operating losses in its contract chipmaking business are expected to narrow in the second half of the year on a gradual recovery in demand, Samsung said. The key for Samsung now is next-generation AI memory. Attention has been on Samsung's attempt to secure certification from Nvidia for its most advanced product, 12-layer HBM3E. Its failure to do so is creating an unusually long lead time for SK Hynix in the highly lucrative space, while US competitor Micron has been rapidly advancing, further reducing Samsung's pie. Customer evaluation and shipments of its advanced memory products are proceeding, Samsung said. What Bloomberg Intelligence Says Samsung could lag SK Hynix in operating profit during 2H as it reported 2Q operating profit 26 per cent below consensus. Its high-bandwidth memory (HBM) chips could remain affected by US regulations which restrict exports to China. Also, US tariffs on consumer electronics and smartphones might weigh more on Samsung than on SK Hynix. But Samsung's 3Q profit could recover sequentially as seasonality kicks in. -Masahiro Wakasugi, Takumi Okano, BI analysts SK Hynix has meanwhile aggressively positioned itself as Nvidia's primary HBM4 supplier. It shipped the world's first 12-layer HBM4 samples to customers ahead of schedule, followed by Micron in June, while Samsung has had to revise its 12-layer HBM3E design. Bernstein analysts led by Mark Li estimated in a June 23 note that SK Hynix holds 57 per cent of the HBM market in 2025, followed by Samsung at 27 per cent and Micron at 16 per cent. At its annual shareholder meeting in March, Samsung vowed to strengthen its position in the HBM market this year, responding to concerns over its underperformance in AI. Jun Young-hyun, head of Samsung's chip business, said that Samsung's failure to secure an early lead in the HBM market contributed to it lagging behind rival SK Hynix and pledged not to repeat the mistake with HBM4. The next-generation memory is expected to be used in Nvidia's Rubin GPU architecture. In April, Samsung said it shipped enhanced HBM3E samples to major customers and expected that product line to contribute to revenue in the second quarter. The company had also said it plans to begin mass production of HBM4 chips in the second half of the year.
Business Recorder
03-07-2025
- Business
- Business Recorder
TSX hits record high as investors assess economic data, trade talks
Canada's main stock index hit a record high on Thursday as investors assessed economic data from Canada and the United States, while a U.S.-Vietnam trade pact renewed optimism about global trade agreements ahead of the July 9 tariff deadline. The S&P/TSX composite index gained 0.3% at 26,952.6 points. Data showed that Canada's trade deficit in May was as expected and narrowed after April's record-breaking numbers as total exports rose, and imports fell. Exports and imports to the U.S. dropped to their lowest levels in May, excluding the pandemic year of 2020. Meanwhile, U.S. President Donald Trump signed a trade deal with Vietnam on Wednesday. 'It looks as if we're moving towards more certainty with respect to the tariff situation…as we get closer to an outcome that's so positive, the markets begin to get a little bit excited,' said Robert Gill, portfolio manager at Fairbank Investment Management. On the TSX, technology stocks led sectoral gains with a 1.4% rise. Cybersecurity firm BlackBerry rose 3.3%. Conversely, an index of communication stocks fell about 1%. Energy stocks fell 0.5% tracking a decline in oil prices. Nuvista Energy fell 3.2% after announcing updated annual production guidance due to third party midstream delays. Mining shares edged 0.2% lower, tracking a fall in gold and copper prices. Copper miners Capstone Copper down 2.1%, Teck Resources down 2.3%, and Ero Copper down 2.7%, were among the bottom performers on the main index. Also supporting market sentiment was the Trump administration lifting export restrictions on Chinese-bound shipments from chip design software developers and ethane producers. In the U.S., data showed job growth was solid in June while the unemployment rate fell to 4.1%. Additionally, the U.S. House of Representatives advanced Trump's sweeping tax-cut and spending bill, paving the way for a possible vote on the legislation later in the day ahead of the July 4 holiday.
Time of India
07-06-2025
- Automotive
- Time of India
‘No longer any question..': Donald Trump says China's Xi Jinping has agreed to let rare earth minerals flow to US; sign of thawing tensions
China has issued temporary export permits to rare-earth suppliers serving the three largest US automobile manufacturers. (AI image) Are the US and China finally moving towards some trade agreement? Chinese President Xi Jinping has consented to permit the export of rare earth minerals and magnets to the United States, according to US President Donald Trump 's statement on Friday. This decision could potentially ease tensions between the two largest global economies. When questioned by a reporter on Air Force One about Xi's agreement, Trump confirmed: "Yes, he did." According to a Reuters report, this development follows a rare telephone conversation between Trump and Xi the previous day, which addressed ongoing trade disagreements regarding this subject. Trump indicated the discussion had reached "a very positive conclusion" and stated that "there should no longer be any questions respecting the complexity of Rare Earth products." Further indicating an improvement in relations, China has issued temporary export permits to rare-earth suppliers serving the three largest US automobile manufacturers, according to two sources with knowledge of the situation quoted in the report. Also Read | Donald Trump vs Elon Musk: Who has more to lose - US President or world's richest man? Stakes are high for both! Senior officials from both nations are scheduled to meet in London on Monday for additional discussions. Trump informed reporters on Friday about significant progress in negotiations with China. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 임플란트 최대 할인 지원해드려요 임플란터 더 알아보기 Undo Following discussions in Geneva, Switzerland on May 12, both nations agreed to a 90-day suspension of their reciprocal high-percentage tariffs, which had been implemented by Trump. The announcement positively influenced financial markets, which had been concerned about trade interruptions. However, China's April suspension of exports for essential minerals and magnets continues to affect global supply chains, impacting automakers, semiconductor producers and defence contractors. Trump alleged Chinese breaches of the Geneva accord and implemented restrictions on chip-design software and other Chinese-bound exports. Beijing dismissed these accusations and warned of retaliatory actions. Also Read | 'Give your best offers by…': Donald Trump administration pushes countries to urgently finalise trade deals as tariff deadline looms China maintains strategic control over rare earths and critical minerals, potentially affecting Trump's position as domestic economic performance could decline if manufacturers lack access to these mineral-dependent components. Trump's erratic policy decisions on international trade since his White House return in January have created uncertainty amongst global leaders and the business community. His pattern of announcing strict trade penalties against various nations, followed by sudden withdrawals of these threats, has left both international counterparts and corporate executives perplexed about the administration's actual stance. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Arabian Post
24-04-2025
- Business
- Arabian Post
Tariff Dispute Grounds Boeing Deliveries to China
Boeing has confirmed that Chinese airlines are refusing to accept deliveries of new aircraft due to escalating tariffs, marking a significant setback for the U.S. aerospace manufacturer amid intensifying trade tensions between Washington and Beijing. The company has begun redirecting completed jets to other global customers to mitigate the impact. Three Boeing 737 MAX 8 aircraft, originally intended for Xiamen Airlines and Air China, have been returned to the U.S. These aircraft were ferried to China just as tariffs were being announced and enforced, highlighting the sudden shift in trade dynamics. China currently accounts for about 10% of Boeing's commercial aircraft backlog. The company had scheduled around 50 deliveries to China for the remainder of the year but is now seeking to reassign 41 already-built or in-production jets. Boeing's leadership has stated that production will not continue for customers unwilling to take delivery, underscoring the operational challenges posed by the trade dispute. There are 36 Chinese-bound aircraft at various stages of completion in the U.S., and Boeing still has 130 unfilled orders from Chinese entities, including 96 for the 737 MAX. Chief Financial Officer Brian West emphasized that while this presents a short-term challenge, Boeing is prepared to re-market the aircraft, with other customers already expressing increased interest. The trade tensions have led to China imposing a 125% tariff on U.S. goods in retaliation for the U.S. increasing tariffs on Chinese exports to 145%. This has significantly increased the cost of acquiring Boeing planes for Chinese carriers, making such purchases economically unfeasible. Boeing CEO Kelly Ortberg expressed confidence that the ongoing U.S.-China trade war will not hinder the company's financial recovery or aircraft delivery targets. Despite the challenges, Boeing has reported a narrowed loss of $31 million for the first quarter of 2025, down from $355 million a year earlier, indicating signs of recovery. See also Vietnam's Economy Faces Challenges Amid US Tariff Implementation The company is seeking alternative buyers for up to 50 aircraft initially ordered by Chinese airlines. Production is already underway for 41 of these aircraft, with nine more planned for delivery in 2025. Ortberg noted inquiries from non-Chinese airlines, suggesting potential for reallocation.
