Samsung to hold earnings concall on July 31

Samsung to hold earnings concall on July 31

Samsung Electronics, a leading player in the global smartphone and memory chip markets, is set to report its second-quarter financial results on July 31. The company's earnings call comes amidst a challenging period, as it struggles to capture demand from the artificial intelligence (AI) chip market.

According to a recent report, Samsung expects a 56% fall in operating profits for the second quarter, compared to the same period last year. This drop is significantly deeper than estimates from LSEG, which are weighted toward more consistently accurate analyst forecasts [1]. The company projects its operating profit for the quarter to be around 4.6 trillion won, down from 10.44 trillion won year over year.

Samsung's revenue is also expected to fall short of estimates, with the company projecting revenue to hit 74 trillion won, which is below LSEG's smart estimates of 75.55 trillion won [1]. The company's struggles can be attributed to its lagging position in high-bandwidth memory (HBM) chips, a critical component in AI chips. Competitors such as SK Hynix and Micron have secured key positions as Nvidia's suppliers, while Samsung's efforts to get its HBM chips certified by Nvidia have reportedly been delayed [1].

The delay in certification means Samsung will likely miss out on near-term upside, as Nvidia accounts for roughly 70% of global HBM demand [1]. Samsung's chip foundry business also continues to face weak orders and intense competition from Taiwan Semiconductor Manufacturing Company (TSMC) [1].

Despite these challenges, Samsung Electronics' stock has seen a year-to-date increase of about 16%, according to LSEG data. The company will release its detailed third-quarter results towards the end of this month.

References:
[1] https://www.nbclosangeles.com/news/business/money-report/samsung-expects-second-quarter-profits-to-more-than-halve-as-it-struggles-to-capture-ai-demand/3740075/