Samsung’s Q2 Profit Plunge Highlights Challenges in AI Chip Race

Samsung Electronics Co. faces mounting pressure as its second-quarter operating profit is projected to plummet 39% to 6.3 trillion won ($4.62 billion), marking the weakest performance in six quarters. The slowdown stems from delayed approvals for its high-bandwidth memory chips and growing competition in the AI data center market.

Nvidia's sluggish certification process for Samsung's HBM3E 12-high chips has created a bottleneck, leaving the tech giant struggling to keep pace with rivals SK Hynix and Micron. While competitors capitalize on soaring demand for AI memory chips, Samsung's reliance on the constrained Chinese market continues to dampen growth prospects.

Investor concerns intensify as Samsung's semiconductor business grapples with dual challenges: US restrictions on high-end chip sales to China and its inability to secure major shipments to Nvidia. The company's HBM revenue remained stagnant in Q2, with no near-term resolution in sight for these structural hurdles.