Samsung's Q2 Operating Profit Drops 39% Due to HBM Certification Delays and Trade Policies

Samsung Electronics, a global leader in memory chips, is expected to report a significant decline in its second-quarter operating profit, with a projected 39% year-on-year decrease. The company's operating profit for the April to June period is anticipated to be around 6.3 trillion Korean won, approximately 46.2 billion USD. This sharp decline is attributed to delays in the certification of High Bandwidth Memory (HBM) and trade policies that have hindered the supply of AI chips.

The delay in HBM certification has slowed down the shipment of these advanced storage chips, which are crucial for AI applications. This has limited Samsung's revenue growth, as the company is a key supplier to NVIDIA, a major player in the AI chip market. The trade policies, particularly those imposed by the United States, have further exacerbated the situation, making it difficult for Samsung to meet the demand for AI chips.

The impact of these challenges is evident in the company's performance. The delay in HBM certification and the trade restrictions have not only affected Samsung's ability to supply AI chips but also its overall financial health. The company's reliance on the AI chip market, which is currently facing supply chain disruptions, has made it vulnerable to these external factors.

The situation highlights the broader challenges faced by the semiconductor industry. The global demand for AI chips is growing, but the supply chain is fraught with obstacles, including certification delays and trade restrictions. These issues are not unique to Samsung but are indicative of the broader challenges faced by the industry.

Samsung's most recent HBM3E 12-layer chip has not yet been certified by NVIDIA, which has resulted in stagnant HBM revenue for the second quarter. Despite Samsung's earlier claims that the HBM chip development would be completed by June, there has been no confirmation of the certification status of the 12-layer HBM3E chip. Notably, NVIDIA has already begun supplying similar products to AMD starting in June.

In the smartphone business, despite potential U.S. tariff threats, Samsung has maintained relatively stable sales due to inventory demand. However, its core businesses, including chips, smartphones, and home appliances, continue to face multiple uncertainties due to trade policies. These include the Trump administration's plan to impose a 25% tariff on non-U.S. produced smartphones and the July 9 deadline for imposing "reciprocal tariffs" on multiple countries. Additionally, the U.S. is considering revoking technology licenses for Samsung and other global chip manufacturers in China, further increasing operational risks.

Market reactions indicate that Samsung's stock price has risen by approximately 19% this year, significantly lagging behind the 27.3% increase in the Korean benchmark KOSPI index. This underperformance reflects market doubts about Samsung's technological catch-up capabilities and the ongoing geopolitical risks squeezing tech giants.