Samsung Elec Q2 profit likely to drop 39% on weak AI chip sales

Written by Heekyong Yang

Seoul (Reuters) -Samsung Electronics is expected to predict 39 % in operating profit in the second quarter on Tuesday, and weighs delay in providing advanced memory chips for the leader of NVIDIA artificial intelligence chip.

The world’s largest memory slices maker is expected to be a operating profit in April to June 6.3 trillion Won ($ 4.62 billion), and the lowest income in six quarters and a quarterly fractured in a row, according to Lseg Smartestimate.

The prolonged weakness in its financial performance deepened investor concerns about the ability of the technology giant in South Korea to catch the smaller competitors in developing high -range memory chips (HBM) used in artificial intelligence data centers.

Its major competitors, SK Hynix and Micron, have benefited from the strong demand for memory chips for the AI ​​Agency, but Samsung’s gains have been subjected to communications as they are dependent on the China market, where advanced chip sales by the United States have been restricted

Analysts said her efforts to get the latest version of her HBM chips to NVIDIA approved from NVIDIA slowly.

“It is possible that HBM’s revenues will remain in the second quarter, as China’s sales restrictions continued and Samsung has not yet started providing HBM3E chips that are 12 to NVIDIA,” said Rio Yong Ho, Senior analyst at NH Investment & Securities.

He said that Samsung’s shipments from the new slide to NVIDIA are unlikely to be the task of this year.

Samsung, which in March expected a useful progress on its early HBM chip, refused to comment if the 12 -layers HBM 3e chips have passed the rehabilitation process in NVIDIA.

The American company said in June that the company started providing the slide to AMD.

Analysts said that Samsung smartphones are likely to remain strong, and to help the demand for stocks before potential US tariffs on imported smartphones.

Many of its main companies, including chips, smartphones, and home appliances, continue to face uncertainty in business from various American commercial policies, including president Donald Trump’s proposal to obtain a 25 % tariff on non -made phones and the deadline on July 9 for “mutual definitions” against many of its commercial partners.

The United States is also studying the cancellation of the licenses granted to international chips, including Samsung, making it difficult for them to receive American technology in their factories in China.

The shares in Samsung, the worst performance among the main memory makers this year, rose about 19 % this year, which led to a 27.3 % performance in the standard KOSPI.