Samsung Electronics reports 55% drop in Q2 profit due to chip delays and US-China restrictions.

Samsung Electronics reported a 55% drop in Q2 operating profit due to delays in high-bandwidth memory chip shipments and US restrictions on advanced chip sales to China, impacting its semiconductor division. The company's Q2 operating profit was 4.7 trillion won ($3.37 bln), its weakest in six quarters, while revenue rose 0.7% to 74.6 trillion won. The semiconductor division's profit fell to 400 bln won, below 1 trillion won for the first time in six quarters.

Seoul, South Korea — Samsung Electronics Co. reported a significant 55% drop in its second-quarter operating profit, as delays in high-bandwidth memory chip shipments and U.S. export restrictions on advanced chip sales to China continued to weigh on its key semiconductor division. The company's Q2 operating profit stood at 4.7 trillion won ($3.37 billion), its weakest in six quarters [1].

Revenue for the April-June period rose 0.7% to 74.6 trillion won, in line with earlier estimates [1]. However, the semiconductor division's profit fell to 400 billion won, marking the first time in six quarters that the figure dropped below the 1 trillion won mark [1, 2]. The division's struggles were attributed to inventory value adjustments to memory chips and one-off costs from U.S. export restrictions on sales to China [1].

Despite a weak profit, chip sales climbed 11% on-year to 27.9 trillion won, driven by demand for premium server chips and increased foundry orders [2]. Samsung's DX division, which includes mobile, TV, and home appliance businesses, saw its sales fall 16% on-year to 43.6 trillion won, posting 3.3 trillion won in operating profit [2].

Samsung's underwhelming quarterly report comes after the company won a $16.5 billion contract from Tesla Inc. to produce AI chips at an upcoming plant in Taylor, Texas [3]. The stock is up 10% since the agreement broke, bringing Samsung’s gains in July to over 20% and putting the stock on track for its best month in more than four years [3].

The company has been stepping up spending on research and development and front-end capacity to catch up with rivals SK Hynix Inc. and Micron Technology Inc. in AI memory chips [3]. However, investors remain concerned about Samsung’s ability to claw its way into the market for cutting-edge HBM chips, now dominated by SK Hynix [3].

References:
[1] https://finance.yahoo.com/news/samsung-q2-profit-drops-55-235112665.html
[2] https://www.koreaherald.com/article/10543729
[3] https://www.bloomberg.com/news/articles/2025-07-30/samsung-chip-arm-logs-big-profit-miss-in-sign-of-widening-crisis