Analysts are predicting a challenging 2025 for Samsung, with its operating profit potentially dropping by a massive $30 billion due to a lack of a clear strategic direction and increasing competition.
Despite efforts to streamline its semiconductor division, Samsung is facing significant hurdles. The company's foundry business is struggling to attract new customers for its 3nm GAA process, while other issues continue to plague its performance.
Major Profit Decline
Revised estimates suggest Samsung's operating profit for 2025 will be around 40.48 trillion Korean won (approximately $30 billion), a steep decline from the previous projection of 63.59 trillion Korean won (roughly $47.7 billion) made in August 2024. This signifies a nearly 40% drop in expected profit.
Competition and Challenges
Samsung is falling behind in the race to meet the increasing demand for AI-related components, with its high-bandwidth memory (HBM) market share being eroded by rival SK hynix. Additionally, Chinese manufacturers are flooding the DRAM market with more affordable options, placing added pressure on Samsung.
Compounding its problems, Samsung is struggling to increase yields for its 3nm GAA technology, losing Qualcomm as a customer. Qualcomm will reportedly use TSMC's 3nm "N3P" process for the Snapdragon 8 Elite Gen 2.
External Pressures
Potential tariff policies enacted by the newly elected U.S. President, Donald Trump, could drive up the prices of Samsung's memory chips, further impacting demand for its products, including smartphones. The annual shipment target for its handsets in 2025 has already been reduced by 8 million units, from 239 million to 229.4 million.
Without a concrete plan of action, Samsung's operating profit could dwindle even further in the coming year.
