Samsung signage throughout the Nvidia GPU Know-how Convention (GTC) in San Jose, California, US, on Thursday, March 20, 2025.
David Paul Morris | Bloomberg | Getty Pictures
South Korea’s Samsung Electronics on Tuesday forecast a 56% fall in income for the second quarter as the corporate struggles to seize demand from synthetic intelligence chip chief Nvidia.
The reminiscence chip and smartphone maker stated in its steerage that working revenue for the quarter ending June was projected to be round 4.6 trillion received, down from 10.44 trillion Korean received 12 months over 12 months.
The determine is a deeper plunge in comparison with sensible estimates from LSEG, that are weighted towards forecasts from analysts who’re extra constantly correct.
In accordance with the sensible estimates, Samsung was anticipated to publish an working revenue of 6.26 trillion received ($4.57 billion) for the quarter. In the meantime, Samsung projected its income to hit 74 trillion received, falling in need of LSEG sensible estimates of 75.55 trillion received.
Samsung is a number one participant within the international smartphone market and likewise one of many world’s largest makers of reminiscence chips, that are utilized in gadgets comparable to laptops and servers.
Nevertheless, the corporate has been falling behind opponents like SK Hynix and Micron in high-bandwidth reminiscence chips — a complicated sort of reminiscence that’s being deployed in AI chips.
“The disappointing earnings are as a consequence 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, stated in regards to the earnings steerage.
SK Hynix, the chief in HBM, has secured a place as Nvidia’s key provider. Whereas Samsung has reportedly been working to get the most recent 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 advised CNBC that it’s clear that Samsung has but to cross Nvidia’s qualification for its most superior HBM.
“On condition that Nvidia accounts for roughly 70% of worldwide HBM demand, the delay meaningfully caps near-term upside,” Wang stated. 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 employees in some divisions, citing sources aware of the matter.
Samsung Electronics’ inventory is up about 16% year-to-date, in response to LSEG information. The corporate will launch its detailed third-quarter outcomes in direction of the tip of this month.
