Samsung Electronics’ chip business reported a roughly 40 per cent drop in profit after US export controls dented sales of its high-end chips even as it seeks to catch up in the lucrative AI memory arena.
March-quarter operating profit at Samsung’s chip segment tumbled to 1.1 trillion won (US$770 million) on erosion in average selling price as well as a drop in sales of its key high-bandwidth memory chips due to export controls, according to a company statement. Some clients also deferred orders in anticipation of upcoming enhanced HBM3E products, it said.
Those outweighed a boost from Chinese customers stockpiling chip supplies ahead of US tariffs.
“Samsung is planning to ramp up the enhanced 12-layer HBM3E product in the second quarter to meet demand from some clients,” said Greg Noh, an analyst with Hyundai Motor Securities. “But unless there is demand from Nvidia, it’s difficult to expect dramatic improvement in the chip business.”
South Korea’s largest company faces mounting challenges in its HBM business. The company has struggled for months to secure Nvidia’s final nod for its most advanced HBM products, which are today the most lucrative segment for memory makers. Incheon-based SK Hynix retains the top position in providing these chips enabling AI accelerators.
