Category: 3. Business

Just a few years ago, Samsung Electronics stood as a leading force in the global semiconductor race, dominating one chip sector and eyeing Taiwan’s TSMC in the battle for supremacy in another.

But recent stumbles – including its failure to capitalize early on the artificial intelligence boom – has left it outmaneuvered, experts say, as the company struggles with deepening market share losses.

Samsung’s second-quarter operating profit plummeted 55% to 4.7 trillion won ($3.4 billion), down from 10.4 trillion won ($7.5 billion) a year earlier, though its revenue increased slightly compared to the same period last year.

Operating profit for its chip division, historically a cash cow that used to account for two-thirds of its total profit, shrank by nearly 94% from April to June compared to a year ago.

It blamed the worse-than-expected performance on inventory value adjustments, low utilization rate for its contract chipmaking business and continued fallout from US export controls on advanced AI chips to China – a key market for Samsung.

Thursday’s disappointing earnings report reignites concerns about the future of the embattled South Korean tech giant.

Samsung warned investors of its dismal performance in its earnings projection earlier this month.

The results come on the heels of a $16.5 billion deal with Tesla, announced this week, to produce its new chips – a move expected to boost Samsung’s outlook.

Looking ahead for the second half the year, Samsung said it plans to proactively meet the growing demand for high value-added and AI-driven products and continue to strengthen competitiveness in advanced semiconductors.

South Korea’s largest conglomerate has run into significant headwinds in recent years across both of its key revenue streams: the manufacturing of memory chips, which help devices store data, and logic chips, which power data processing and computation.

Once the industry’s leading memory chipmaker, Samsung has lost ground to rivals like South Korean SK Hynix and American Micron Technology, particularly in the fast-growing market for high bandwidth memory (HBM) sector. HBM, made up of stacks of DRAM memory chips (dynamic random access memory) used for short-term data storage, are essential for AI processors developed by companies like Nvidia and AMD.

Meanwhile, Samsung’s logic semiconductor business trails industry leader TSMC both in cutting-edge chip technologies and market share.

In the first quarter of this year, SK Hynix overtook Samsung to lead the global DRAM market, while TSMC extended its dominance in logic chips with a 68% market share, compared to just 8% for Samsung, according to market research firm TrendForce.

Sanjeev Rana, head of Korea research at CLSA, a brokerage firm, said a series of “missteps” by Samsung – most notably management’s failure to anticipate the surge in AI demand – has contributed to its current struggles.

“They were slow to recognize the coming AI revolution, and they bet on some other products, other technologies, which, in hindsight, didn’t turn out to be very good bets,” he said, explaining that Samsung overlooked the potential of HBM initially.

As a result, Samsung has so far missed out on being a supplier for its most advanced high-bandwidth memory product to Nvidia, which accounts for nearly 80% of global HBM demand last year, according to Rana. The product has repeatedly failed Nvidia’s performance tests, though he expects the company to clear them in the next two months.

While Samsung announced in June that it managed to secure orders from AMD and Broadcom, rivals SK Hynix and Micron have already begun delivering samples of more advanced memory chips to customers.

At the same time, Samsung’s logic chip business – once central to its ambition to rival TSMC – is also under mounting pressure. Despite tens of billions of investments over the past few years, the company has been unable to secure meaningful orders for its advanced chips, leading to underutilized facilities, Rana said.

Last year, CLSA estimated that Samsung’s contract chipmaking business posted an operating loss of 5.6 trillion won ($4.1 billion). That figure is expected to rise to 6.6 trillion won ($4.8 billion) this year.

US restrictions on the sale of advanced chips to China have also taken a toll on Samsung’s revenue, as shipments to Chinese clients and projects were forced to pause pending regulatory review, said Joanne Chiao, an analyst at TrendForce.

But with some chips now having cleared the review process, the second quarter is expected to be the most affected period, she added.

Tesla offered Samsung a lifeline this week. Its CEO Elon Musk announced that the electric vehicle company has tapped the Korean chipmaker to make its new chips for self-driving cars and humanoid robots in a $16.5 billion deal.

“Samsung’s giant new Texas fab will be dedicated to making Tesla’s next-generation AI6 chip,” he said in a post on X. “Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency. This is a critical point, as I will walk the line personally to accelerate the pace of progress.”

Samsung’s shares surged more than 6.9% to reach their highest level since September following news of the deal.

Tesla currently sources its AI4 chips, which power its advanced driver assistance systems called Full Self-Driving (FSD) software, from Samsung, but it enlisted TSMC to produce its AI5 chips, according to Musk.

The deal came after Samsung postponed the operational start of its chipmaking plants in Taylor, Texas to 2026 from its original schedule of 2024, as it struggled to win customers for the project.

Ray Wang, research director focusing on semiconductor industry at Futurum Group, called the deal with Tesla “significant,” saying it could boost Samsung’s struggling profitability and validate its capabilities in producing advanced chips.

The agreement will also help increase utilization of its Texas facilities, improving the company’s return on investment, he added.

Rana said that although mass production for the Tesla project won’t begin until 2027, the deal is a boost to market sentiment and represents “a big word of confidence.”

“The management has done a lot of restructuring for this business in the last 12-15 months or so, so I think they now understand what the problems were, and they have made some efforts to resolving those issues,” he said. “Things will get better from the second half (of the year).”

Novel therapies, including chimeric antigen receptor (CAR) T cell, have represented an important advancement in treatment for patients with relapsed/refractory (R/R) B-cell acute lymphoblastic leukemia (ALL). However, CAR T-cell therapy comes with some common and serious adverse effects, such as cytokine release syndrome (CRS) and immune effector cell–associated neurotoxicity syndrome (ICANS).

Research presented at the American Society of Clinical Oncology annual meeting focused on the efficacy and safety of obecabtagene autoleucel (obe-cel) across different age groups, and another explored brexucabtagene autoleucel (brexu-cel) as a consolidation treatment.^1,2 The findings underscore the progress being made to deliver effective and manageable therapeutic options for R/R ALL and highlight the potential for broader applicability of CAR T-cell therapies, including in older adult populations.

Obe-Cel in Older Adults

A post hoc analysis of the phase 1b/2 FELIX trial (NCT04404660) evaluated the efficacy, safety, and persistence outcomes of obe-cel based on patient age (< 55 years vs ≥ 55 years).¹ A total of 127 patients were infused with obe-cel; 62.2% were younger than 55 years (median age, 36.0 years) and 37.8% were 55 years or older (median age, 65.0 years).

Patients younger than 55 years had higher proportions who were Hispanic/Latino (36.7% vs 18.8%), had extramedullary disease at lymphodepletion (29.1% vs 8.3%), had received prior blinatumomab (53.2% vs 22.9%), and had received prior inotuzumab ozogamicin (35.4% vs 25.0%). However, the older age group had a higher proportion of patients with Philadelphia chromosome–positive disease (47.9% vs 16.5%), and the median bone marrow blast burden at lymphodepletion was higher in the older age group.

At the median follow-up of 21.5 months, the overall remission rate was 72.2% in the younger group compared with 87.5% in the older group. Similar rates of responders who had at least 1 postinfusion next-generation sequencing achieved measurable residual disease (MRD) negativity by month 3 (84.2% of those < 55 years and 83.3% of those ≥ 55 years). Similarly, event-free survival was comparable at 14.3 months for the younger group and 11.7 months for the older group. CAR T-cell persistence was similar between the groups.

Grade 3 or higher CRS occurred in 2.5% and 2.1% of patients younger than 55 years and 55 years or older, respectively. ICANS occurred in 5.1% of the younger group and 10.4% in the older group.

“These findings indicate that obe-cel is effective and has a positive benefit/risk profile regardless of age, including in older adults with R/R [B-cell] ALL…” the researchers concluded.

Brexu-cel CAR T Expansion in Patients With Low Marrow Blasts

Among patients with low marrow blast burden (< 5%), there was successful CAR T-cell expansion after treatment with brexu-cel, and it was possible to identify patients likely to have a durable relapse-free survival (RFS).²

The study, conducted at MD Anderson Cancer Center, included 46 patients being treated with brexu-cel outside of clinical trials. All of the patients had marrow blasts less than 5% and no evidence of extramedullary disease at the time of lymphodepletion. The majority (76%) of patients were MRD negative. At a median of 8 days after infusion, patients reached postinfusion peak CAR T expansion, with the median peak expansion being 13.5 cells/µL.

The researchers found 15 cells/µL was the peak CAR T expansion threshold to be an optimal predictor for RFS. Half of the patients reached a peak CAR T expansion of at least 15 cells/µL, and the median peak CAR T expansion for the 10 patients who were MRD positive at the time of infusion was 77.5 cells/µL, and 7 of the 10 had a peak expansion of at least 15 cells/µL. The median peak expansion for patients who were MRD negative at the time of infusion was 10 cells/µL, with 44% achieving a peak expansion of at least 15 cells/µL.

Among the patients who reached a peak expansion of at least 15 cells/µL, 91% remained alive in remission. Among the 23 patients whose peak expansion was less than 15 cells/µL, 65% were alive in remission. The 12-month RFS for all 46 patients was 71%, with a higher RFS for patients with peak expansion of at least 15 cells/µL (86%) compared with expansion less than 15 cells/µL (58%).

References

1. Shah B, Yallop D, Jabbour E, et al. Efficacy and safety outcomes of obecabtagene autoleucel (obe-cel) stratified by age in patients (pts) with relapsed/refractory B-cell acute lymphoblastic leukemia (R/R B-ALL). Presented at: ASCO 2025; May 30-June 3, 2025; Chicago, IL. Abstract 6576.

2. Khaire N, Jabbour E, Short N, et al. Brexucabtagene autoleucel (brexu-cel) as consolidation treatment in adults with B-cell acute lymphoblastic leukemia. Presented at: ASCO 2025; May 30-June 3, 2025; Chicago, IL. Abstract 6543.

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More tariff revenue for the US government

A widening of the US trade deficit

China is exporting less to America

More trade deals

US consumer prices are starting to rise

Santos today announced a major milestone for its Pikka phase 1 project with the safe arrival of key processing modules by barge at Oliktok Point, Alaska. This was a complex operation beginning from the Hay River Marine Terminal, Canada, transiting 1,086 miles along the Mackenzie River system to Tuktoyaktuk on the Beaufort Sea, and 380 miles via sea barge from Tuktoyaktuk to Oliktok Point.

Remaining processing modules are being mobilised from the Pacific northwest and are scheduled to arrive at site during August. The Seawater Treatment Plant (STP), fabricated in Batam, Indonesia, is also currently on tow to Alaska.

The processing modules and STP will be installed, integrated and then commissioned together with already installed facilities in readiness for first oil.

Santos Managing Director and Chief Executive Officer Kevin Gallagher said the Pikka phase 1 project continues to make excellent progress.

“Our highly capable team that delivered early completion of the pipeline in just two winter seasons followed by a successful river-lift of key processing modules, has created the opportunity for early startup and production from Pikka.”

Mr Gallagher said, “Pikka phase 1 is almost 90 per cent complete and we are currently drilling our 21st well.

“The Pikka project together with the Barossa LNG project are expected to deliver around a 30 per cent increase in production by 2027. These two world-class projects are expected to set the company up with long-term, stable cash flows to support both returns to shareholders and investment in future production growth.”

This ASX announcement was approved and authorised for release by Kevin Gallagher, Managing Director and Chief Executive Officer

Most global governments have failed to act on the 2023 UN pledge to triple the world’s renewable energy capacity by the end of the decade, according to climate analysts.

The failure to act means that on current forecasts the world will fall far short of its clean energy goals, leading to a continued reliance on fossil fuels that is incompatible with the target of limiting global heating to below 1.5C.

A report by the climate thinktank Ember found that only 22 countries, most within the EU, have increased their renewable energy ambitions since more than 130 signed up to the renewables pact at the UN’s Cop28 climate talks in Dubai almost two years ago.

This means that the global sum of national renewables targets is now just 2% higher than at Cop28. While this could be enough to double the world’s renewable energy capacity from 2022, to reach 7.4 terawatts (TW) by 2030, governments would fall well below the 11TW needed to meet the UN goal of tripling renewables, according to the analysts.

“Tripling global renewables capacity by 2030 is the single biggest action this decade to stay on track for the 1.5C climate pathway,” the report said. “Yet, despite the landmark Cop28 agreement to reach 11,000GW of renewables by 2030, national targets remain largely unchanged and fall short of what is needed.”

The report found that beyond the EU only seven countries have updated their renewable energy goals since the pact was signed, including Mexico and Indonesia, which have watered down their targets.

Countries that have failed to act include the US, China and Russia, which are some of the world’s largest energy users and together are responsible for almost half of the world’s annual carbon emissions.

The fate of the world’s renewable energy deal may depend on the actions of Beijing, which is expected to finalise its 15th five-year plan for energy later this year, covering the period 2026-30. Washington and Moscow do not have renewable energy targets for 2030, and according to Ember their political leaders are not expected to set any.

In India, clean energy targets have also remained unchanged, but the country’s ambition to build 500GW of renewables by 2030 is already aligned with the global goal to triple renewable energy capacity, the thinktank added.

The country that has showed the greatest renewables ambition since Cop28 is Vietnam, which this year pledged to increase its capacity by 86GW by the end of the decade. Australia and Brazil have promised to increase their homegrown renewables by 18GW and 15GW.

The UK upgraded its renewable energy plans last year with a pledge to build an extra 7GW of renewable energy by 2030 to reach the Labour government’s target to create a virtually carbon-free electricity system. In Korea, renewables are expected to grow by 9GW by 2030.