Samsung Faces 94% Decline in Chip Business; Q2 2025 Revenue Increases YoY But Operating Profit Plummets Over 50%

Samsung’s recent strategic overhaul could enhance its financial performance in the upcoming quarters, helping it recover from recent losses. However, the company’s Q2 2025 earnings report revealed a significant decline in operating profit—more than 50%—despite a slight uptick in revenue, which reached 74.6 trillion won (approximately $53.5 billion) compared to 74.43 trillion won in the same quarter last year. A closer examination of these figures highlights a staggering 94% drop in Samsung’s semiconductor division, although other sectors provide a more encouraging outlook.

Potential for Chip Revenue Growth Through 2nm GAA Technology and Tesla Partnership

During the Q2 2025 earnings conference call, Samsung disclosed an operating profit of 4.7 trillion won (approximately $3.37 billion).This figure fell short of market analysts’ expectations, which had anticipated a profit of 5.33 trillion won. Alarmingly, the company’s net earnings for Q2 2024 were 10.44 trillion won, reflecting a dramatic decline. Examining the semiconductor sector reveals that operating profit plummeted from 6.45 trillion won last year to a mere 400 billion won ($287 million), with revenue reported at 27.9 billion won ($20 billion).

Samsung’s struggles in securing clients for its 3nm GAA technology contributed to these disappointing results. On a brighter note, the company reported strong sales for its Galaxy S25 series. The mobile and network business segment saw an operating profit rise to 3.1 trillion won ($2.22 billion), a notable increase from 2.23 trillion won last year. Revenue in this segment also surged to 29.2 trillion won from 27.38 trillion won year-on-year. Samsung plans to further enhance revenue and sales through the introduction of new foldable smartphone models.

To address the financial challenges stemming from its declining chip business, Samsung has reportedly entered into a substantial agreement worth $16.5 billion with Tesla for 2nm GAA wafers. Currently, the manufacturer is in the process of prototype mass production for the Exynos 2600, aiming to achieve a yield rate of 70% for its 2nm GAA technology by the close of 2025. While developing this cutting-edge technology may take time, Samsung is poised to compete directly with TSMC, having completed the basic design for its next-generation 2nm GAA process and planning to advance to a third-generation node, known as SF2P+, within the next two years.