Samsung Profit Halves in 2025 Amid Chip Market Turmoil

Samsung Electronics Co. announced a 56% drop in operating profit in the June quarter, representing its first fall since 2023 and showing the extent of worsening troubles in the chip sector following US restrictions on AI chip exports to China and rising inventory writedowns at Samsung. 

Samsung, based in South Korea, said it would sell 3.9 trillion worth of shares in a stock buy-back, but investors shook off the confirmation with the stock moving relatively sideways on the Seoul exchange.

Samsung’s dominance of the memory chip sector has been weakened by its loss of the competitive high ground to SK Hynix Inc., which has emerged as a significant player in high-bandwidth memory chips for AI applications post-ChatGPT. SK Hynix and its major competitor, Micron Technology, now have shipped almost as many AI chips paired with Nvidia’s AI accelerators in AI chips as Samsung.

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Elsewhere Samsung’s contract chip-making company continues to generate losses, now with further challenges generated by tighter US export restrictions. Southern Dork city will still look to put the best team on the field, but viewing Samsung’s results will be concerning, as it battles political tensions and growing AI competition.