Samsung’s foundry losses deepen as US export controls bite
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Samsung Electronics Co.’s semiconductor division posted a disappointing profit for the June quarter, underscoring mounting challenges at the world’s largest memory chipmaker. The critical business unit recorded an operating profit of just 400 billion won ($288 million), far below analysts’ consensus estimate of 2.73 trillion won. The shortfall was largely attributed to mounting losses at its foundry division and tightening US export controls on high-bandwidth memory (HBM) chips. South Korea’s tech giant, which had issued a downbeat profit and revenue guidance earlier in July, reported net income of 4.93 trillion won—missing the 6.37 trillion won expected by analysts. Samsung’s foundry losses deepen as US export controls bite The profit slump stemmed partly from a one-time inventory write-down at Samsung’s foundry business, which was impacted by weak demand from China and delayed chip shipments due to export restrictions. Declining utilization rates also weighed on earnings. The company said this came despite sustained demand for premium memory chips used in servers. Samsung Electronics reported a more than 15-fold surge in operating profit for the second quarter of 2024, buoyed by a rebound in semiconductor prices fueled by strong demand from the artificial intelligence sector. The world’s leading maker of memory chips, smartphones, and TVs estimated its operating profit reached 10.4 trillion won ($7.54 billion) for the three months ending June 30, up sharply from just 670 billion won ($482 million) in the same period last year. The result surpassed the 8.8 trillion won SmartEstimate compiled by LSEG, which prioritizes forecasts from historically accurate analysts. It also marked Samsung’s most profitable quarter since Q3 2022. Analysts noted that, beyond rising chip prices, the strong performance was likely aided by the reversal of previous inventory write-downs, as the accounting value of Samsung’s chip stock recovered. For now, the tech firm anticipates that foundry losses…
Filed under: News - @ July 31, 2025 1:27 am