Samsung Electronics Reports 55% Drop in Q2 Operating Profit Amid Semiconductor Weakness
Samsung Electronics has announced its second-quarter 2025 financial results, posting ₩74.6 trillion in revenue and ₩4.68 trillion in operating profit, representing a 0.67% year-on-year revenue increase but a 55.23% decline in operating profit.
For the first half of 2025, Samsung recorded ₩153.7 trillion in revenue and ₩11.4 trillion in operating profit, with its semiconductor division contributing ₩53 trillion in sales and ₩1.5 trillion in operating profit.
Semiconductor Business Under Pressure
Samsung’s Device Solutions (DS) division continued to face challenges. Its operating profit has dropped sharply from ₩6.45 trillion in Q2 2024 to just ₩400 billion in Q2 2025, marking a steep decline over consecutive quarters.
While DS revenue increased 11% quarter-on-quarter to ₩27.9 trillion, operating profit fell due to inventory write-downs in the memory business and non-memory operations impacted by export restrictions.
The memory division saw higher demand for HBM3E, high-capacity DDR5, and SSDs for servers, but one-off charges related to inventory valuation led to weaker earnings. The System LSI unit achieved steady sales by supplying SoCs built on GAA process technology but faced rising development costs.
Foundry sales improved quarter-on-quarter; however, inventory write-downs related to advanced AI chips impacted by export controls and low utilization of mature process lines weighed on profitability.
Mobile and Consumer Electronics Performance
The MX (mobile experience) division experienced a seasonal decline in smartphone sales compared to Q1. However, strong flagship sales ensured year-on-year growth in both revenue and profit, with resource optimization helping sustain double-digit profitability.
The DX division saw reduced sales due to waning effects from new smartphone launches and intensified competition in the TV market, with revenue falling 16% QoQ.
The VD (visual display) segment benefited from higher sales of Neo QLED, OLED, and large-sized TVs, but global competition limited overall profit growth.
Outlook: AI, Memory, and New Products to Drive Recovery
Samsung expects the IT market to gradually recover amid growing demand in AI and robotics despite global economic uncertainty and geopolitical risks.
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Memory: Samsung will expand HBM, DDR5, LPDDR5x, and 24Gb GDDR7 products for AI servers.
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NAND: The company aims to accelerate the 8th-generation V-NAND transition and expand high-capacity SSD sales.
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System LSI: Focus on strengthening Exynos competitiveness and launching new nano-prism image sensors.
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Foundry: Plans to begin mass production of 2nm GAA process chips for mobile devices while expanding key customer sales.
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MX: Continued focus on Galaxy Z Fold7, Z Flip7, S25 series, and AI-powered A-series models to boost smartphone market share.
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Consumer Electronics: Expansion of AI-powered appliances and high-value products, plus supply chain optimization to minimize tariffs.
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Harman: Growth driven by consumer audio and automotive electronics.
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Display: Increased sales of small- and mid-sized panels with the release of key clients’ new products.
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