Samsung Electronics in 2025: Crisis and Opportunity

이미지 출처: Pixabay

Samsung Electronics in 2025: A Crossroad of Crisis and Opportunity


---

Mounting Challenges Facing Samsung Electronics

Entering 2025, Samsung Electronics finds itself in a situation best described as “besieged on all fronts.” The company is grappling with multiple setbacks—geopolitical pressures, widening gaps with competitors, legal risks, and internal management hurdles. These challenges are interconnected, collectively shaking Samsung’s stock performance, credibility, and long-term strategy.


---

① Intensified US Export Restrictions – A Direct Hit from Geopolitical Rivalry

The most pressing challenge comes from Washington’s tightening restrictions on semiconductor exports to China.

What changed:
In July 2025, the US Department of Commerce revoked the Verified End-User (VEU) privilege that Samsung and SK Hynix had enjoyed for their Chinese fabs.

Before:
The VEU framework allowed Korean chipmakers to swiftly import cutting-edge US equipment into Chinese fabs under a blanket approval.

After:
Without VEU, every shipment requires individual approval. The true risk lies not in bureaucratic delays but in the possibility that Washington may deny shipments outright at any time.

Why revoked:
Officially, to prevent technology from being diverted into China’s military sector. In practice, this reflects the US–China tech rivalry, shielding domestic firms (Micron, Intel) while suppressing China’s semiconductor self-sufficiency.

Market reaction:
Shares of Samsung and Hynix both dropped immediately. Global media described the move as “a blockade on the expansion of Korean chipmakers in China.” Major Chinese clients like Tencent, Alibaba, and Baidu are now seen as unstable sources of revenue.


Bottom line: This is not merely a bureaucratic hassle but a structural constraint that forces Samsung to reduce reliance on China.


---

② Disappointing Q2 Earnings – Operating Profit Plunges 55%

Samsung’s Q2 2025 earnings fell well short of expectations.
Operating profit was $3.4 billion, down 55% YoY.

Semiconductors (Device Solutions):
Profit collapsed 93.8% YoY to just $280 million.

Key reasons:

1. Loss of HBM market share – SK Hynix secured deals with Nvidia and AMD, leaving Samsung sidelined.


2. Texas fab delays – Slower ramp-up hurt client trust.


3. Supply chain disruption – Rising logistics costs and Middle East instability pressured sourcing.



Year-over-year comparison:

Q2 2024 profit: $7.5B

Q2 2025 profit: $3.4B



The sharp decline underscores that if Samsung’s semiconductor division falters, the group’s entire growth engine weakens.


---

③ Patent Lawsuit Defeat – $117 Million in Damages

In early 2025, a Texas court ordered Samsung to pay $117 million to Japan’s Maxell over smartphone display patents.

Background:
Maxell alleged Samsung infringed on display technology patents.

Samsung’s stance:
Denied claims and appealed, but reputational and financial damage was already done.

Investor reaction:
Some recalled Samsung’s past protracted legal battles with Apple, raising concerns about another long fight.


Patent disputes are not just financial burdens—they undermine trust and bargaining power globally.


---

④ Losing Ground in the HBM Memory Market

In the AI era, HBM (High Bandwidth Memory) is the “rice of semiconductors.”
Despite its dominance in DRAM, Samsung trails rivals in HBM.

Market share (Q1 2025):

SK Hynix: 53%

Micron: 28%

Samsung: 19%


Reasons:

1. Delays in HBM3E launch.


2. Failure to secure Nvidia/AMD contracts.


3. Reports of overheating in early products.




Given HBM’s central role in AI computing, Samsung’s weakness here poses a long-term strategic threat.


---

Summary of Setbacks

US restrictions → shrinking China market

Profit slump → reduced investment capacity

Patent lawsuit → higher costs + reputational damage

HBM loss → weakened AI era positioning


Samsung is now at one of its most severe tests in recent history.


---

Positive Catalysts for Samsung

Despite the headwinds, several positive developments provide Samsung with potential upside.


---

① $16.5 Billion Long-Term Deal with Tesla

In July 2025, Samsung signed a $16.5B deal with Tesla, supplying semiconductors until 2033.

Scope:
AI chips for autonomous driving, high-speed communication modules, and sensor controllers.

Significance:

1. Restores confidence in Samsung’s Austin fab.


2. Differentiates Samsung in the automotive AI market.


3. Provides steady revenue and strategic ecosystem entry.




This deal has been widely seen as a lifeline for Samsung’s semiconductor business.


---

② US Tariff Exemption

In August 2025, Washington imposed 100% tariffs on certain advanced products.
Thanks to diplomatic negotiations, Samsung and Hynix were exempted.

Importance:
Without the exemption, prices would have doubled—crippling US sales.

Impact:
The exemption preserved price competitiveness, calming investor fears and lifting stock prices.



---

③ Pyeongtaek P4 Fab – Preparing for HBM4

Samsung resumed construction at its P4 plant in Korea.

Goal: Mass-produce HBM4 for next-gen AI, autonomous driving, and supercomputers.

Why crucial:
Unlike HBM3, HBM4 demands far higher technological breakthroughs.
If Samsung succeeds here, it can reset market dynamics.



---

④ Governance Risk Resolved – Supreme Court Ruling

After a decade-long legal battle over the 2015 merger, Korea’s Supreme Court cleared Chairman Lee Jae-yong in July 2025.

Effects:

1. Removes leadership uncertainty.


2. Speeds up long-term strategy execution.


3. Sends positive signals to global investors.





---

⑤ New Product Launches – Expanding into AI and XR

Samsung has two “Unpacked” events scheduled for September 2025.

Tri-fold smartphone – A new form factor beyond foldables.

AI Glasses – AR + AI assistant integration.

XR headset (“Project Moohan”) – Competing with Apple Vision Pro and Meta Quest, backed by Google and Qualcomm.


This signals Samsung’s shift from a smartphone maker to a broader AI + XR ecosystem player.


---

Hidden Strength – Revenue Sharing with Google

Since 2020, Samsung has had a Mobile Revenue Share Agreement with Google.

Structure:
Chrome, Google Search, and Assistant come pre-installed.
Samsung receives a portion of ad and search revenue.

Benefits:

1. Dual revenue streams – hardware sales + ad revenue.


2. Stable cash flow, less tied to cycles.


3. Stronger bargaining power in the Android ecosystem.




This often-overlooked deal provides Samsung with consistent earnings, even when hardware sales soften.


---

Final Assessment – Crisis and Opportunity Coexist

Samsung’s 2025 landscape can be summarized as follows:

Risks: US export restrictions, weak earnings, legal battles, HBM weakness.

Opportunities: Tesla partnership, tariff exemption, P4 fab, governance clarity, new products, Google revenue-sharing.


In the short term, uncertainty will weigh on performance.
But in the long term, Samsung retains the firepower and strategic levers to rebound—especially if it succeeds in HBM4 leadership and ecosystem expansion (AI, XR, Google).


---

Key Takeaways for Investors

1. Risk-conscious investors → Focus on dividends + conservative entry.


2. Growth-oriented investors → AI, autonomous driving, and XR are Samsung’s strongest long-term plays.


3. Portfolio perspective → As a dominant global chip supplier, Samsung offers both defensive and growth attributes.




---

Conclusion

Samsung remains a company where crisis and opportunity coexist.
Its short-term challenges are undeniable, but its long-term prospects hinge on seizing next-generation growth engines—HBM4, automotive AI chips, and XR devices—while leveraging its hidden Google revenue stream.

If Samsung can execute on these fronts, it has the potential to reclaim its leadership in the global semiconductor race.


---

📌 Sources

Barron’s – Samsung, SK Hynix Stocks Drop on Export Curbs

Statesman – Samsung profit drops 55% as chip delays weigh

PC Gamer – Samsung, SK Hynix may lose right to import US equipment

Financial Times – Samsung falls behind in HBM market

Reuters – Tesla, Samsung sign $16.5B chip supply deal

Reuters – Korea envoy: Samsung, SK Hynix exempt from tariffs

Sammy Fans – Samsung’s new fab for HBM4

Reuters – Supreme Court clears Samsung chairman Lee

Tom’s Guide – Samsung tipped to reveal tri-fold phone and AI glasses

US DOJ – Google Antitrust Trial Documents (Revenue Share Agreements)

Reuters – Google revenue-sharing disclosures

Reddit – Google paid $8B to default apps on Samsung devices



---

※ This article is for informational purposes only and does not constitute investment advice. All investment decisions and risks remain the sole responsibility of the investor.