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Samsung Electronics announced its second-quarter 2025 earnings guidance, posting an operating profit of 4.6 trillion won, down 55.94% from a year earlier. / Source: Yonhap News

Samsung Electronics reported a sharp drop in operating profit for the second quarter of 2025, hit hard by weak performance in its core semiconductor business.

According to its earnings guidance released on July 8, the company posted 74 trillion won in consolidated revenue and 4.6 trillion won in operating profit for the April–June period. While sales dipped just 0.1% year-on-year, operating profit plunged 55.9%. Compared to the previous quarter, revenue fell 6.5% and operating profit was down 31.2%.

The earnings disappointment—deemed an “earnings shock” by analysts—was largely driven by one-off costs in the semiconductor (DS) division and unfavorable external conditions. The memory business was hit by inventory valuation losses and other non-recurring expenses. Meanwhile, the non-memory segment suffered from restrictions on advanced AI chip exports to China, which led to sales disruptions, inventory write-downs, and lower factory utilization.

Still, Samsung expressed cautious optimism for the second half of the year, citing ongoing customer evaluations and shipments of its improved high-bandwidth memory (HBM) products. The company expects a gradual recovery in semiconductor utilization rates as AI-related demand rebounds later in the year.