Samsung Electronics recently navigated a complex financial quarter, revealing a notable dip in overall profits primarily driven by persistent volatility within the semiconductor market, directly impacting its crucial chip business.
For the quarter ending June 30, the technology giant reported consolidated revenue of 74.6 trillion won ($57.4 billion), marking a modest 1% year-over-year increase but a 6% decline from the preceding quarter. Operating profit saw a significant 55% year-over-year reduction to 4.7 trillion won ($3.6 billion), with net profit also falling by 48% to 5.1 trillion won ($3.9 billion).
The Device Solutions division, encompassing its vast semiconductor operations, heavily influenced these results. Despite an 11% quarter-over-quarter rise in memory chip revenue to 21.2 trillion won ($16.3 billion), fueled by demand for DDR5 and HBM3E chips critical for artificial intelligence servers, the division’s profitability sharply declined, with operating income plummeting 94% year-over-year to just 0.4 trillion won ($308 million).
Samsung’s foundry business also faced considerable headwinds during this period, as US restrictions on advanced AI chips to China significantly curtailed sales, further underscoring the challenges within the semiconductor sector.
However, the financial report was not without its bright spots. The Mobile eXperience division showcased resilience, with smartphone revenue climbing 7% from the previous year to 28.5 trillion won ($21.9 billion), even after a 21% dip from the prior quarter following the Galaxy S25 release. Robust A-series and tablet sales, coupled with enhanced cost management, propelled the mobile unit to a 41% year-over-year operating profit increase, reaching 3.1 trillion won ($2.4 billion).
The company’s display unit, Samsung Display Corp., also delivered solid performance, reporting 0.5 trillion won ($385 million) in profit on 6.4 trillion won ($4.9 billion) in sales, representing a 17% year-over-year growth. This expansion was largely attributed to strong demand for small and medium-sized displays in premium smartphones and growing needs within information technology and automotive segments.
Furthermore, Harman, Samsung’s automotive and audio division, achieved its best quarter in a year, posting 0.5 trillion won ($385 million) in profit, a remarkable 67% increase year-over-year. This growth was driven by the strategic scaling up of high-margin audio systems and meticulous cost optimization.
Looking ahead to the second half of 2025, Samsung is strategically positioning itself to leverage increasing demand for AI infrastructure and next-generation devices. Within its semiconductor division, the company aims to expand sales of high-performance memory products, including 128-gigabyte DDR5 and 24-gigabyte GDDR7 for AI servers, while accelerating the shift to eighth-generation V-NAND across its SSD portfolio. Its foundry business plans to commence mass production of a two-nanometer mobile system-on-chip using GAA technology, focusing on improving fab utilization and profitability.
Notably, beyond the earnings report, Samsung secured a significant deal with Tesla Inc., poised to further bolster its semiconductor division. This involves a substantial $16.5 billion contract for manufacturing advanced chips, likely utilizing Samsung’s cutting-edge four- and three-nanometer processes, to support Tesla’s sophisticated AI-powered autonomous driving systems and future vehicle platforms. In mobile and consumer electronics, Samsung anticipates continued strong momentum driven by upcoming form-factor launches, including innovative foldables and XR devices.
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