Samsung has announced its earnings forecast for the first quarter of 2025, announcing that it expects a 21 percent drop in operating profit. The company’s decline is mainly due to weakening demand for artificial intelligence chips and ongoing losses in semiconductor manufacturing.

Samsung’s first-quarter earnings will decline

According to estimates, Samsung’s operating profit for the January-March period will be around $3.62 billion. This figure will be well below the profit made in the same period last year.

The decline in the semiconductor sector is due to the decline in the high-bandwidth memory (HBM) segment, especially against its rival SK Hynix. While SK Hynix, which supplies HBM to large customers such as Nvidia, stands out with its superiority in this area, Samsung has been forced to offer less advanced chips to Chinese customers.

However, the high inventory purchases made by Chinese companies last year have led to a serious decrease in demand this year. In addition, the decline in DRAM and NAND flash memory prices has negatively affected the company’s profitability. According to TrendForce data, DRAM prices fell by 25 percent annually in the first quarter, while NAND flash prices fell by 50 percent.

Samsung’s focus on standard memory products has directly affected these price drops. The company continues to redesign more advanced HBM chips to offer strategic customers, but it was stated that this process will take time.

On the other hand, the company’s mobile and networking unit performed relatively better. This unit is expected to report a significant profit in the first quarter. So what do you think about this? You can share your views with us in the comments section below.