1. Decoding the Earnings Shock
Samsung Electronics reported preliminary Q2 2025 earnings of KRW 745.66 trillion in revenue, KRW 4.67 trillion in operating profit, and KRW 4.93 trillion in net profit. These figures significantly missed market expectations and represent a substantial decline compared to the same period last year. Profitability deteriorated across all business segments: DX (smartphones and consumer electronics), DS (semiconductors), SDC (displays), and Harman (automotive). Key factors contributing to the decline include weak smartphone and TV sales, falling semiconductor prices, and the global economic slowdown.
2. Segment Breakdown: Identifying the Pain Points
- DX: Weak smartphone and TV sales, intensified price competition
- DS: Declining memory chip prices, slowing demand
- SDC: Falling display panel prices, increased competition
- Harman: Reduced demand for automotive components, intensifying market competition
3. External Factors: Navigating the Uncertainties
External factors such as the global economic slowdown, increasing exchange rate volatility, rising raw material prices, and interest rate hikes negatively impacted Samsung’s performance. Geopolitical risks, including the US-China trade dispute, further contribute to the uncertainty.
4. Action Plan for Investors
Increased stock price volatility is expected in the short term, necessitating a cautious investment approach. In the medium to long term, securing future growth engines, such as AI and automotive businesses, will likely determine the stock’s trajectory. Investors should consider a comprehensive investment strategy incorporating earnings recovery prospects, competitor analysis, and changes in the external environment.