Samsung Electronics has issued a stark profit warning for the second quarter of 2025, forecasting a steep year-on-year decline in earnings as global trade tensions and U.S. export restrictions weigh heavily on the South Korean tech giant.
In a regulatory filing, the company said its operating profit for the April–June period is expected to fall to 4.6 trillion Korean won (€2.86 billion), a 56% drop from the 10.44 trillion won it reported during the same period last year. The forecast fell significantly short of analyst expectations and underscores the continued challenges facing the world’s largest manufacturer of memory chips and smartphones.
Sales revenue for the quarter is projected to remain flat at approximately 74 trillion won (€46 billion), despite a record rise in semiconductor exports from South Korea in June.
“The company has been heavily impacted by US restrictions on the sale of AI chips to China,” said Dan Coatsworth, investment analyst at AJ Bell. “This is a major blow to Samsung’s semiconductor business, which has also suffered from inventory-related costs and reduced demand in some sectors.”
Samsung’s chip division, once a key profit driver, has been struggling with rising production costs and softer demand, exacerbated by a U.S.-led crackdown on China’s access to advanced semiconductor technology. First introduced in 2022 and intensified since then, Washington’s export controls have targeted the flow of high-end AI chips and semiconductor manufacturing equipment to China, affecting not only American firms like Nvidia, but also global players such as Samsung.
Adding to the pressure, U.S. President Donald Trump recently announced a 25% tariff on goods imported from South Korea and Japan, set to take effect on August 1. These new trade barriers are expected to further strain the company’s margins and increase the cost of doing business in key overseas markets.
In a move to shore up investor confidence, Samsung also unveiled a 3.9 trillion won stock buyback plan. Share repurchases typically reduce the number of outstanding shares, thereby boosting earnings per share and increasing shareholder value. Despite Tuesday’s modest 0.5% drop in share price at the close of trading in Seoul, Samsung’s stock remains up 15% year-to-date.
The company is set to release its full second-quarter results at the end of July, where investors will be closely watching for further insight into how it plans to navigate escalating geopolitical and economic headwinds.
