Global tech giant Samsung Electronics is bracing for a potentially significant drop in its Q2 2025 profit. Recent reports suggest a likely 39% year-on-year decrease. There’s a potential key factor behind this: weaker-than-expected sales in its AI chip division. Samsung remains a powerhouse in various tech sectors. However, for a while now, their entire semiconductor manufacturing branch has been struggling.

As reported by Reuters, Samsung will announce an April-June operating profit of 6.3 trillion won ($4.62 billion). This is its lowest income in six quarters, based on LSEG SmartEStimate figures.

39% profit drop for Samsung Q2: AI chip sales the main culprit

The overall economic climate and a general cooling in consumer electronics demand are also contributing to this projected downturn. However, the specific mention of AI chip sales indicates a challenge in a sector many anticipate to be a major growth driver. It’s worth noting that the AI chip market is still relatively young and intensely competitive. There are already established players like NVIDIA currently holding a strong position.

Samsung has failed to capitalize on the massive demand for AI hardware in the current era. In fact, the company apologized to its investors for this and promised changes. Meanwhile, rivals like SK Hynix and Micron have better addressed the situation. Both have benefited greatly from robust memory chip (HBM) demand for AI hardware.

Samsung tries to turn the situation around

Samsung has attempted moves to catch up in the segment. For example, the company is actively seeking Nvidia certification for its AI chips. This will allow Samsung to gain a significant new customer to supply AI hardware to. However, according to analysts, even these efforts are moving slowly. Meanwhile, the company has secured AI-related contracts with other majors, including AMD.

Despite this potential dip, it’s important to keep the bigger picture in mind. Samsung is a diverse company with leading positions in smartphones, displays, memory chips, and more. The AI chip sector might be facing headwinds in this particular quarter. However, Samsung continues to invest heavily in research and development across various cutting-edge technologies, including AI.
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Source: ndroidheadlines.com