Samsung Electronics, the world’s largest storage chip manufacturer, is scheduled to announce its preliminary results for the second quarter of this year on the 8th. Due to delays in supplying advanced storage chips to AI chip leader Nvidia, Samsung Electronics is expected to report a 39% drop in its second quarter operating profit on Tuesday.

According to LSEG SmartEStimate data, Samsung is expected to announce operating profit of KRW 6.3 trillion (USD 4.62 billion) for the months of April to June, the lowest level in six quarters and the fourth consecutive quarter of decline.

The long-term weak financial performance of Samsung Electronics has intensified investors’ concerns about whether it can catch up with competitors in developing high bandwidth memory (HBM) chips for artificial intelligence data centers.

Samsung Electronics’ main competitors SK Hynix and Micron have benefited from strong demand for storage chips required for artificial intelligence, but Samsung Electronics’ growth has been suppressed due to sales restrictions on advanced chips in the United States.

Analysts point out that Samsung’s efforts to provide Nvidia with the latest version of HBM chips are also progressing slowly.

NH Investment&Securities senior analyst Ryu Young ho said, “Due to ongoing sales restrictions and Samsung not yet starting to supply Nvidia with its 12 layer stacked HBM3E chip, second quarter HBM revenue may remain flat. ”

He also stated that it is unlikely that Samsung will ship a large number of new chips to Nvidia this year.

Samsung had anticipated in March that its HBM chip could make substantial progress as early as June. But the company refused to disclose whether its 12 layer stacked HBM3E chip has passed Nvidia’s certification process.

However, Samsung has started supplying AMD with 12 layer stacked HBM3E chips.

Analysts also suggest that Samsung’s smartphone sales are expected to remain robust, driven by inventory demand, before the United States may impose tariffs on imported smartphones.

Many of Samsung’s key businesses, including chips, smartphones, and home appliances, continue to face commercial uncertainty brought about by various US trade policies, including President Trump’s proposal to impose a 25% tariff on non US made smartphones.

Samsung’s stock price is the worst performing among major memory chip manufacturers this year, despite its cumulative increase of about 19%. In contrast, the South Korean Composite Stock Index rose by about 27% during the same period.