Samsung’s Mobile Phone Triumph Gleams Even with 55% Decline in Q2 Profits
Samsung’s Q2 2025 performance highlights that it remains a formidable player, albeit facing significant challenges.
What you should be aware of
– Samsung’s revenue reached $53.5B, but profits plummeted by 55%, primarily due to a difficult quarter in its chip sector.
– Semiconductor profits fell significantly — from $4.6B last year to merely $287M — as a result of Nvidia delays and stricter U.S. export regulations.
– With Meta and Microsoft increasing their AI requirements, Samsung is counting on a stronger latter half of the year.
Samsung has published its Q2 2025 results, revealing a mixed picture, where overall performance has declined, albeit a few segments have managed to remain stable.
The South Korean conglomerate generated KRW 74.6 trillion (around $53.5 billion), yet profits experienced a downturn, with operating profit decreasing to KRW 4.7 trillion ($3.37 billion). This reflects a 55% drop compared to the previous quarter and is almost identical year-over-year.
Samsung attributes the downturn primarily to its semiconductor division, which faced substantial challenges this quarter.
The semiconductor sector was particularly adversely affected, recording only KRW 400 billion in profit ($287 million). This represents a dramatic fall from the KRW 6.5 trillion earned last year. A significant factor contributing to the drop is the delay in delivering high-bandwidth memory (HBM) chips to Nvidia, alongside tightened U.S. export restrictions impacting chip sales to China.
AI demand from major tech firms sparks Samsung’s optimism
Despite robust demand from AI and cloud-oriented companies, Samsung struggled to seize the opportunity this quarter as rivals like SK Hynix and Micron did.
However, there are indications of a recovery on the horizon. Samsung anticipates a more robust second half, driven by increased AI demand from major stakeholders such as Meta and Microsoft. A new trade agreement between the U.S. and South Korea, implementing a 15% chip tariff, also offers some relief and predictability.
Additionally, Samsung is making a significant gamble on its foundry business with a $16.5 billion chip order from Tesla, which will commence manufacturing at its Texas facility in 2026.
During the earnings call, Daniel Araujo, VP of Samsung’s Mobile Experience team, revealed that the Galaxy S25 FE will launch sooner than expected, likely around August or early September, according to Android Authority.
Mobile and electronics stabilize Samsung amid semiconductor downturn
Looking forward, Samsung is prioritizing advanced chip technology as it aims to bridge the performance gap in the AI arena. It is in the process of developing HBM-3E and HBM-4 memory, essential components for maintaining relevance in the AI chip competition.
Samsung’s mobile division performed well, generating roughly $2.23 billion in profit, a nearly 40% increase from last year’s $1.6 billion. The uplift was driven by strong sales across its product range, including not just phones but also laptops, smartwatches, tablets, and even smart rings.
Despite a challenging Q2 for its semiconductor business, Samsung found some equilibrium within its mobile and electronics sectors. The company is banking on AI advancements and new partnerships to aid in turning the tide in the second half of 2025.
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