Samsung Electronics has reported a 55% year-on-year decline in its operating profit for the second quarter of 2025, falling to KRW 4.7 trillion ($3.4 billion), as global semiconductor headwinds continue to pressure earnings.
The tech giant, in its Q2 report released Thursday, attributed the steep drop to a difficult chip market, worsened by inventory value adjustments and one-off costs related to U.S. export restrictions on high-end chips destined for China.
Total consolidated revenue for the quarter stood at KRW 74.6 trillion ($53.8 billion), representing a 5.8% dip from the previous quarter.
While Samsung’s semiconductor-heavy Device Solutions (DS) division saw operating profit tumble to KRW 0.4 trillion ($288 million), other segments showed resilience. The Mobile eXperience (MX) and Networks Businesses posted year-on-year growth in both revenue and profit, thanks to strong sales of the Galaxy S25 series, Galaxy A series, and Galaxy tablets.
Despite higher revenues from high-performance server memory products, the memory business faced profitability issues due to valuation adjustments. The foundry unit also struggled with underutilized capacity and restrictions on advanced AI chip exports.
Samsung Display Corporation (SDC) emerged as a bright spot, reporting KRW 6.4 trillion ($4.6 billion) in revenue and KRW 0.5 trillion ($360 million) in operating profit. Growth was driven by demand for new smartphone models and expansion into IT and automotive displays.
Looking to the second half of 2025, Samsung signaled cautious optimism. The DS division plans to target the growing demand for AI server products and bolster its semiconductor capabilities. Meanwhile, the MX unit will push a flagship-first strategy while enhancing AI features in mid-range smartphones.
Samsung says it expects gradual recovery as it pivots toward high-value, AI-driven technologies to regain momentum in a challenging market.