Samsung chip arm logs big profit miss in sign of widening crisis
The pivotal unit reported operating profit of 400 billion won (US$288 million) for the June quarter versus analysts' average projection for 2.73 trillion won, hurt by US export controls on high-bandwidth memory chips and losses at its foundry arm.
South Korea's largest company, which gave grim preliminary operating profit and revenue numbers earlier in July, said on Thursday net income came to 4.93 trillion won, missing the analysts' estimate of 6.37 trillion won.
Profit fell after Samsung's foundry arm, which relies in part on Chinese demand, booked a one-time inventory cost as export controls led to unsold AI chips. Usage rates also fell. The profit decline was despite solid demand for high-end memory products for servers, it said.
Operating losses at its foundry unit are expected to narrow in the second half of the year on a gradual recovery in demand, the company said.
A man walks past an ad for the Samsung Galaxy S25 series smartphones at a Samsung store in Seoul on July 8, 2025. Photo: AFP
Samsung's underwhelming quarterly report comes after the company won a US$16.5 billion contract from Tesla to produce AI chips at an upcoming plant in Taylor, Texas. Its stock is up 10 per cent since news about the agreement broke on Monday, bringing Samsung's gains in July to over 20 per cent and putting the stock on track for its best month in more than four years.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
South China Morning Post
13 minutes ago
- South China Morning Post
HKEX to reduce minimum spread of 300 stocks from Monday to cut cost, boost trading
Hong Kong Exchanges and Clearing (HKEX) , which operates Asia's third-largest stock market, will reduce the minimum trading spread for about 300 stocks starting Monday, a move aimed at lowering transaction costs and increasing turnover. 'The minimum spread is the minimum price change for a stock traded on an exchange and determines the tightest bid-ask spread allowed,' the HKEX said in the conclusion of its consultation on the spread reform. 'A reduction of minimum spreads could therefore encourage trades to be transacted in smaller sizes.' The reform is part of the Hong Kong government's initiative to encourage the HKEX to enhance market infrastructure, lower transaction costs, and attract more international investors, thereby strengthening the city's status as an international financial centre. From Monday, the minimum spreads for stocks priced between HK$10 (US$1.27) and HK$20 will be halved to HK$0.01. Stocks priced from HK$20 to HK$50 will see their minimum spreads cut by 60 per cent, from HK$0.05 to HK$0.02. As of Friday, about 300 stocks, exchange-traded funds, and real estate investment trusts (REITs) were trading between HK$10 and HK$50, representing about 30 per cent of average daily turnover, according to exchange data. HKEX will reduce the minimum trading spread for about 300 stocks starting Monday. Photo Eugene Lee 'After narrowing the trading spread, the cost for investors will decrease, encouraging more of them to trade in the local stock market to help boost turnover further,' said Robert Lee Wai-wang, lawmaker and chairman of Hong Kong-based Grand Finance Group.
South China Morning Post
an hour ago
- South China Morning Post
How Singapore's economic architect Goh Keng Swee shaped its state-linked giants
The First Fools: B-Sides of Lee Kuan Yew's A-Team is a new anthology about Singapore's founding leaders. In this excerpt, author Aaron Low spotlights Goh Keng Swee – widely remembered as Singapore's first finance minister and economic architect – whose lesser-known role as one of the country's most influential businessmen saw him create a network of state-linked firms that helped define Brand Singapore. Advertisement Entrepreneurs start businesses for many reasons. Some do it because of the firm belief that they can change the world around them, like Jeff Bezos, who foresaw how the internet would transform the way people bought books. Others are problem solvers such as Jack Ma, who created Alibaba to empower small Chinese firms and compete in the new digital economy. Then there are those like Microsoft's Bill Gates and Paul Allen, who turn their expertise into ventures and look to profit from their innate skills. But Goh was different. He believed in business as a means to an end, one that was for the greater good. Influenced by Adam Smith, the father of modern economics, Goh endorsed the idea that the invisible hand of business can produce goods and services efficiently, create jobs, and benefit the economy as a whole. But to do so, capitalism had to be tempered and guided wisely to avoid its excesses. There was another, more pressing, motivation: a deep desire to sustain Singapore's fragile independence and keep the idea of a nation alive. His form of capitalism, as his former protégé and top civil servant Philip Yeo said, was tinged with a large dose of socialism. Goh Keng Swee in 1948. He would go on to become Singapore's first finance minister and later the country's deputy prime minister. Photo: Handout 'He runs the company efficiently and properly, borrows money and hires people. He is no different from a businessman. But the key difference is that Dr Goh is a state capitalist. The businessman makes profit for himself; Dr Goh did it for the public good,' said Yeo.
South China Morning Post
2 hours ago
- South China Morning Post
How Singapore's economic architect Goh Keng Swee shaped its state-linked giants
The First Fools: B-Sides of Lee Kuan Yew's A-Team is a new anthology about Singapore's founding leaders. In this excerpt, author Aaron Low spotlights Goh Keng Swee – widely remembered as Singapore's first finance minister and economic architect – whose lesser-known role as one of the country's most influential businessmen saw him create a network of state-linked firms that helped define Brand Singapore. Advertisement Entrepreneurs start businesses for many reasons. Some do it because of the firm belief that they can change the world around them, like Jeff Bezos, who foresaw how the internet would transform the way people bought books. Others are problem solvers such as Jack Ma, who created Alibaba to empower small Chinese firms and compete in the new digital economy. Then there are those like Microsoft's Bill Gates and Paul Allen, who turn their expertise into ventures and look to profit from their innate skills. But Goh was different. He believed in business as a means to an end, one that was for the greater good. Influenced by Adam Smith, the father of modern economics, Goh endorsed the idea that the invisible hand of business can produce goods and services efficiently, create jobs, and benefit the economy as a whole. But to do so, capitalism had to be tempered and guided wisely to avoid its excesses. There was another, more pressing, motivation: a deep desire to sustain Singapore's fragile independence and keep the idea of a nation alive. His form of capitalism, as his former protégé and top civil servant Philip Yeo said, was tinged with a large dose of socialism. Goh Keng Swee in 1948. He would go on to become Singapore's first finance minister and later the country's deputy prime minister. Photo: Handout 'He runs the company efficiently and properly, borrows money and hires people. He is no different from a businessman. But the key difference is that Dr Goh is a state capitalist. The businessman makes profit for himself; Dr Goh did it for the public good,' said Yeo.
