Samsung signage in the course of the Nvidia GPU Expertise Convention (GTC) in San Jose, California, US, on Thursday, March 20, 2025.
David Paul Morris | Bloomberg | Getty Photographs
South Korea’s Samsung Electronics on Tuesday forecast a 56% fall in earnings for the second quarter as the corporate struggles to seize demand from synthetic intelligence chip chief Nvidia.
The reminiscence chip and smartphone maker projected working revenue for the quarter ending June to be round 4.6 trillion gained, down from 10.44 trillion Korean gained yr over yr.
The determine is a deeper plunge in comparison with SmartEstimate from LSEG, which is weighted towards forecasts from analysts who’re extra persistently correct.
In line with LSEG SmartEstimate, Samsung was anticipated to submit an working revenue of 6.26 trillion gained ($4.57 billion) for the quarter. In the meantime, Samsung projected its income to hit 74 trillion gained, falling wanting LSEG good estimates of 75.55 trillion gained.
Samsung is a number one participant within the international smartphone market and in addition one of many world’s largest makers of reminiscence chips, that are utilized in gadgets equivalent to laptops and servers.
Nonetheless, the corporate has been falling behind opponents like SK Hynix and Micron in high-bandwidth reminiscence chips — a sophisticated kind of reminiscence that’s being deployed in AI chips.
“The disappointing earnings are as a result of ongoing working losses within the foundry enterprise, whereas the upside within the high-margin HBM enterprise stays muted this quarter,” MS Hwang, analysis director at Counterpoint Analysis, mentioned concerning the earnings steering.
SK Hynix, the chief in HBM, has secured a place as Nvidia’s key provider. Whereas Samsung has reportedly been working to get the newest model of its HBM chips licensed by Nvidia, a report from a native outlet suggests these plans have been pushed again to at the very least September.
The corporate didn’t reply to a request for touch upon the standing of its offers with Nvidia.
Ray Wang, analysis director of semiconductors, provide chain and rising expertise at Futurum Group instructed CNBC that it’s clear that Samsung has but to move Nvidia’s qualification for its most superior HBM.
“On condition that Nvidia accounts for roughly 70% of world HBM demand, the delay meaningfully caps near-term upside,” Wang mentioned. He famous that whereas Samsung has secured some HBM provide for AI processors from AMD, this win is unlikely to contribute to second-quarter outcomes because of the timing of manufacturing ramps.
In the meantime, Samsung’s chip foundry enterprise continues to face weak orders and critical competitors from Taiwan Semiconductor Manufacturing Firm, Wang added.
Reuters reported in September that Samsung had instructed its subsidiaries worldwide to chop 30% of workers in some divisions, citing sources acquainted with the matter.
Samsung Electronics’ inventory is up about 16% year-to-date, in keeping with LSEG information. The corporate will launch its detailed third-quarter outcomes in the direction of the tip of this month.
