Samsung expects profit to halve as tariffs and export curbs bite
Operating profit is expected to be approximately 4.6 trillion Korean won (€2.86 bn), 56% less than the 10.44tn won Samsung reported a year ago.
The firm forecasts its sales revenue to be around 74tn Korean won (€46 billion) for the three months ending in June 2025, which is unchanged compared to the previous year.
'Samsung Electronics' recent struggles continued as it warned on profit,' said AJ Bell investment analyst Dan Coatsworth. 'The company has been heavily impacted by US restrictions on the sale of AI chips to China.'
Washington first started to restrict the flow of semiconductors from the US to China in 2022 as a means to hamper Beijing's tech ambitions. The White House has since ramped up these measures several times, also hurting American chip firms like Nvidia that sell into China.
Related
Samsung ups earnings guidance as chip sales soar on tariff concerns
Samsung sees revenue increase but gives gloomy tariff-related outlook
Trump sends tariff letters, placing 25% duty on Japan and South Korea
Samsung is one of the biggest smartphone manufacturers in the world and is also a leading maker of memory chips, used in devices such as laptops and servers.
The company's semiconductor business also saw a profit decline due to inventory-related costs, and the firm is being negatively impacted by new tariffs from the White House.
US President Donald Trump has announced a 25% tax on goods imported from Japan and South Korea, along with new tariff rates on other countries, starting on 1 August.
Before the latest US tariff rate was announced, promising export data from South Korea raised hopes that semiconductors could drive up the country's exports. They hit a record in June, rising 11.6%.
Samsung also announced a 3.9 trillion won stock buyback program to enhance shareholder value. When a company buys back its own shares, the stock price usually goes up due to higher demand. Typically, the repurchased shares are cancelled, reducing the total number of shares outstanding. This gives remaining shareholders a proportionally larger ownership stake in the company.
The share price was down 0.5% at the close in Seoul, but Samsung's stock is still up 15% year to date. The company will report quarterly results at the end of July.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
4 minutes ago
- Yahoo
Huawei shows off AI computing system to rival Nvidia's top product
SHANGHAI (Reuters) -China's Huawei Technologies showed off an AI computing system on Saturday that one industry expert has said rivals Nvidia's most advanced offering, as the Chinese technology giant seeks to capture market share in the country's growing artificial intelligence sector. The CloudMatrix 384 system made its first public debut at the World Artificial Intelligence Conference (WAIC), a three-day event in Shanghai where companies showcase their latest AI innovations, drawing a large crowd to the company's booth. The system has drawn close attention from the global AI community since Huawei first announced it in April. Industry analysts view it as a direct competitor to Nvidia's GB200 NVL72, the U.S. chipmaker's most advanced system-level product currently available in the market. Dylan Patel, founder of semiconductor research group SemiAnalysis, said in an April article that Huawei now had AI system capabilities that could beat Nvidia. Huawei staff at its WAIC booth declined to comment when asked to introduce the CloudMatrix 384 system. A spokesperson for Huawei did not respond to questions. Huawei has become widely regarded as China's most promising domestic supplier of chips essential for AI development, even though the company faces U.S. export restrictions. Nvidia CEO Jensen Huang told Bloomberg in May that Huawei had been "moving quite fast" and named the CloudMatrix as an example. The CloudMatrix 384 incorporates 384 of Huawei's latest 910C chips and outperforms Nvidia's GB200 NVL72 on some metrics, which uses 72 B200 chips, according to SemiAnalysis. The performance stems from Huawei's system design capabilities, which compensate for weaker individual chip performance through the use of more chips and system-level innovations, SemiAnalysis said. Huawei says the system uses "supernode" architecture that allows the chips to interconnect at super-high speeds and in June, Huawei Cloud CEO Zhang Pingan said the CloudMatrix 384 system was operational on Huawei's cloud platform. Sign in to access your portfolio
CNBC
5 minutes ago
- CNBC
China releases AI action plan days after the U.S. as global tech race heats up
SHANGHAI — The tech race between the world's two largest economies just intensified. China on Saturday released a global action plan for artificial intelligence, calling for international cooperation on tech development and regulation. The news came as the annual state-organized World Artificial Intelligence Conference kicked off in Shanghai with an opening speech by Premier Li Qiang, who announced that the Chinese government has proposed the establishment of a global AI cooperation organization, according to an official readout. Days earlier, U.S. President Donald Trump announced an American action plan for AI that included calls to reduce alleged "woke" bias in AI models and support the deployment of U.S. tech overseas. "The two camps are now being formed," said George Chen, partner at the Asia Group and co-chair of the digital practice. "China clearly wants to stick to the multilateral approach while the U.S. wants to build its own camp, very much targeting the rise of China in the field of AI," Chen said. He noted how China may attract participants from its Belt and Road Initiative, while the U.S. will likely have the support of its allies, such as Japan and Australia. In his speech, Premier Li emphasized China's "AI plus" plan for integrating the tech across industries and said the country was willing to help other nations with the technology, especially in the Global South. The category loosely refers to less developed economies, especially countries outside the U.S. and European orbits. Since 2022, the U.S. has sought to restrict China's access to advanced semiconductors for training AI models. Earlier this month, U.S. chipmaker Nvidia said the U.S. was allowing it to resume shipments of a less advanced H20 chip to China after a roughly three-month pause. However, China has been developing homegrown alternatives, which Nvidia CEO Jensen Huang both praised and described as "formidable" during his third trip to China this month. Former Google CEO Eric Schmidt met with Shanghai Party Secretary Chen Jining on Thursday in the city ahead of the AI conference, according to a city announcement. Schmidt did not immediately respond to a CNBC request for comment.
CNBC
6 minutes ago
- CNBC
Trump arrives in Scotland for golf and bilateral talks as EU trade deal nears
U.S. President Donald Trump, dogged by questions about his ties to disgraced financier and sex offender Jeffrey Epstein, arrived in Scotland on Friday for some golf and bilateral talks that could yield a trade deal with the European Union. Trump told reporters upon his arrival that he will visit his two golf properties in Scotland and meet with British Prime Minister Keir Starmer and European Commission President Ursula von der Leyen, whom he called a "highly respected woman." As hundreds of onlookers cheered his arrival, Trump reiterated his earlier comment about a 50-50 chance of securing a deal with the EU, adding that it would be his administration's largest trade agreement thus far, if it came together. However, he said there were still "sticking points" with Brussels on "maybe 20 different things." Trump said his meeting with Starmer would be more of a celebration of the trade deal already reached than continued work on it, adding, "It's a great deal for both." Before he left Washington, Trump stated that his administration was working diligently on a potential trade deal with the EU, and Brussels was eager to finalize a deal. Von der Leyen said later she would meet Trump in Scotland on Sunday. EU diplomats say a deal could result in a 15% tariff on EU goods, mirroring a framework accord with Japan reached this week and half of the 30% Trump is threatening to impose by Aug. 1. Trump has sought to reorder the global economy after imposing a 10% tariff on nearly all trading partners in April and threatening sharply higher rates for many countries to kick in a week from now. Trump says the moves will reduce the U.S. trade deficit and generate additional revenue, but economists warn that the new trade policies could drive up inflation. Trump, facing the biggest domestic political crisis of his second term, expressed frustration about ongoing questions about his administration's handling of investigative files related to Epstein's criminal charges and his 2019 death in prison. "You make it a very big thing over something that's not a big thing," Trump told reporters in Scotland, urging them to focus on other prominent Americans with ties to Epstein, including former President Bill Clinton. "Talk about Clinton. Talk about the former president of Harvard. Talk about all of his friends. Talk about the hedge fund guys that were with him all the time. Don't talk about Trump," he said. "What you should be talking about is the fact that we have the greatest six months in the history of a presidency." The Epstein issue has caused a rare breach with some of Trump's most loyal Make America Great Again supporters, and majorities of Americans and Trump's Republicans say they believe the government is hiding details on the case, according to Reuters/Ipsos polling. White House officials are hoping the controversy dies down while Trump is abroad, two people familiar with the matter said. Trump will stay at his Turnberry property on Scotland's west coast this weekend, before traveling on Monday to a golf property in Aberdeen, where he will open a second 18-hole course named in honor of his mother, Mary Anne MacLeod. MacLeod was born and raised on a Scottish island before emigrating to the U.S. As he left the White House, Trump said he looked forward to meeting both Starmer and Scottish leader John Swinney, who had publicly backed Democratic candidate Kamala Harris in the 2024 U.S. presidential election. The trip provides Trump and Starmer with an opportunity to strengthen their already warm ties, with key issues on the agenda, including ending Russia's war in Ukraine, according to British and U.S. sources. The deteriorating situation in Gaza is also likely to come up. Starmer on Thursday said he would hold an emergency call with France and Germany over what he called the "unspeakable and indefensible" suffering and starvation being reported there, and called on Israel to allow aid to enter the Palestinian enclave. Gaza health authorities say more than 100 people have died from starvation, most in recent weeks. Human rights groups have said mass starvation is spreading even as tons of food and other supplies sit untouched just outside the territory. Since being elected last year, Starmer has prioritized good relations with Trump, stressing the importance of Britain's defense and security alliance with the U.S., while working to clinch the first tariff-reduction deal with the U.S. in May. The framework agreement reaffirmed quotas and tariff rates on British automobiles and eliminated tariffs on the UK's aerospace sector, but left steel tariffs in place. Starmer is expected to press for lower steel tariffs, but sources close to the matter said it was unclear if any breakthrough was possible during Trump's visit. Trump has described Scotland as a "very special place" and made a similar trip there in 2016 during his earlier presidential run, but he will not necessarily receive a warm welcome. About 70% of Scots hold an unfavorable opinion of Trump, while 18% have a favorable opinion, according to an Ipsos poll conducted in March. Scottish police are gearing up for protests on Saturday in both Aberdeen and Edinburgh, the country's capital. Trump will return to Britain from Sept. 17-19 for a state visit hosted by King Charles. It will make Trump the first world leader in modern times to undertake two state visits to the United Kingdom. The late Queen Elizabeth hosted him at Buckingham Palace for a three-day state visit in June 2019.
