By Adam Clark
Samsung Electronics' ongoing chip problems are looking like good news for its U.S. rival Micron Technology.
The South Korean company said Tuesday that it expects its June-quarter operating profit to plunge 56% plunge to 4.600 trillion won, ($3.34 billion), far below the 6.359 trillion won consensus forecast of analysts polled by FactSet.
Samsung's major issue is the delays it has faced in meeting requirements to supply high-bandwidth memory (HBM) chips -- a crucial component in AI graphics-processing units -- to Nvidia. That has caused it to lose ground to memory-chip peers SK Hynix and Micron.
Samsung said Tuesday that customer evaluation and shipments of its advanced memory chips are proceeding but didn't give any update on hoped-for shipments of the latest generation of 12-layer HBM3E products to Nvidia. That should be a boost for Micron.
"Given the scale of demand for AI GPUs and the amount of money being spent on capex for AI currently, both Micron and SK Hynix are already sold out for 2025, while Samsung is floundering," wrote Richard Windsor, an independent analyst who publishes the industry research site Radio Free Mobile.
South Korea's SK Hynix is the current leader in HBM chips. It has a market share of close to 50%, according to research firm TrendForce, followed closely by Samsung. But Micron is set for a 20% to 25% share of the HBM market by the end of this year, according to analysts at BofA Global Research.
Micron might only have a limited period to take advantage of its rival's problems. Samsung is hoping to regain some of its lost ground with the next generation of memory chips, known as HBM4.
"The signal that Samsung has fixed its problems will be when it qualifies its HBM4 chip with Nvidia, which I am looking for in the second half of this year," Windsor wrote about the South Korean company's chips meeting requirements.
The question that has dogged Micron's stock is whether growth in HBM chips can offset any weakness in DRAM -- dynamic random-access memory -- or NAND chips for use in personal computers, mobile phones, and data centers. Despite its earnings report last month handily beating consensus, the stock flatlined.
Micron shares were up 1.9% in early trading on Tuesday.
Write to Adam Clark at adam.clark@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
July 08, 2025 10:16 ET (14:16 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
Comments