---
endpoint: analytics
pattern: Technology
status: done
latency_ms: 165513
conversation_id: f9c1272b-5d65-4d26-a464-bcebb96eef30
citations: 2
created: 2026-05-31 19:08:53Z
---

# What are the key risks to Samsung Electronics’s growth trajectory?

# Key Risks to Samsung Electronics' (005930) Growth Trajectory

Synthesized from CLSA Korea analyst notes (Apr–Jun 2025) and Samsung's own Special Call commentary. Note: CLSA corpus's most recent Samsung Electronics-anchored note is dated 25 June 2025; "latest" is read relative to that vintage.

## 1. HBM Execution Risk vs Nvidia/AMD — the single biggest near-term swing factor

Samsung's growth bull-case is overwhelmingly anchored on HBM (high-bandwidth memory). CLSA models HBM rising from **18% of DRAM revenue in 2024 to 22% in 2025CL and 32% in 2026CL** (₩22tn) [8]. However, customer qualification is slipping:

- "SEC is still in the process of completing its HBM3E 12-Hi qualification with Nvidia. Although it is upbeat about its prospects of supplying to Nvidia in 2H25, we believe expectations about the timing of supply need to be tempered down. Likewise, with AMD, its expected qualification in 2Q25 also seems to have been delayed." CLSA sees **"some downside risk to our already conservative projection of 40% HBM shipment growth in 2025 (SEC's target is +100% YoY)"** and flags that **HBM4 supply to customers may not commence until mid-1H26** [1].
- 2Q25 OP is tracking **10% below consensus** specifically because of "delays in the supply of HBM3E 12-Hi to major customers, an unfavourable FX and continued losses in foundry" [2][7].

If qualification continues to slip, the 2026 HBM ramp — the core growth narrative — gets pushed right and SK Hynix/Micron gain incremental share.

## 2. Foundry / System LSI Structural Losses

The non-memory businesses remain a meaningful drag:

| Business (2025CL OP mix) | Contribution |
|---|---|
| DRAM | 64% |
| MX (mobile) | 31% |
| NAND | 8% |
| OLED | 8% |
| **Foundry / System LSI** | **-19%** |
| VD/DA | 3% |
| Harman | 3% |
| LCD | 1% |

Source: SEC, CLSA [3]

- Foundry/LSI is structurally loss-making (-19% of 2025CL OP) [3]; the turnaround story rests on **securing 2nm GAA orders from Qualcomm and the captive Galaxy S26 division** plus HPC/AI customers — wins that are not yet booked [6].
- Samsung's own foundry head conceded "many customers… they think the current geopolitical risk is really serious" and that Samsung's IP/ecosystem remains thinner than TSMC's ("TSMC has a more wider ecosystem… 500 customers"; Samsung is "really focusing on this IP and… ecosystem") [10]. Failure to close the 3nm/2nm gap vs TSMC perpetuates the loss pool.

## 3. US Export Controls & Tariff Overhang

- **China-fab equipment waivers at risk** — The Wall Street Journal reported the US Department of Commerce **"may be considering revoking the indefinite waivers on the export of memory production equipment by US companies to Samsung Electronics (SEC) and SK Hynix memory fabs in China."** While not finalized, "it is bound to raise concern over the long-term sustainability of Korean suppliers' production activities in China" [12]. 
- The exposure is material: **~37% of Samsung's DRAM capacity and ~30% of NAND capacity sit in China** [13].
- **HBM-to-China restrictions already hit 1Q25**: "DRAM ASP was down 18% due to c.50% decline in HBM shipments, mainly owing to US controls on exports to China and customers delaying orders ahead of the launch of new HBM3E product in 2Q." [4]
- **Tariff-driven demand pull-forward** creates a 2H air-pocket risk — 1H demand is being boosted by customers front-loading purchases ahead of US tariffs [5], which mathematically risks a sharper 2H rollover if tariffs bite consumer electronics demand.

## 4. Conventional DRAM Cyclicality & Pricing Mix

- DDR4, where prices surged ~40% in 2Q25, is "**less than 10% of shipments**" — the spike has limited blended ASP impact and SEC has already worked down DDR4 inventory [7]. Growth must come from DDR5/HBM mix, which is where qualification delays bite hardest.
- Memory remains structurally cyclical — Samsung itself has acknowledged that "memory business has not been so attractive to most of the investors because it is so cyclical and market is so capricious" with "CapEx volatility and oversupply situation" [11]. Any aggressive capacity expansion (SEC's HBM3E push, or aggressive Chinese conventional DRAM additions) can re-trigger oversupply.
- CLSA flags ongoing "trade war, geopolitical tension between US and China and delayed demand recovery in the IT and server market" plus "rapid production expansion at Chinese chipmakers" as risks across the Korean memory complex [13].

## 5. Smartphone & Consumer Electronics Demand Softness

- CLSA already **"cut 2025CL OP by 5%"** specifically taking "a more cautious view on the smartphone and consumer electronics-related demand" [2 — note 607955304 summary]; Outlook for tech demand remains "murky due to US tariffs."
- MX (mobile) is 31% of 2025CL OP [3] — a tariff-driven slowdown or weaker Galaxy S26 cycle would compound semiconductor cyclicality.

## 6. FX / Macro

- 2Q25 OP miss is partly attributed to "an unfavourable FX" [7]; KRW/USD volatility is a recurring earnings translation risk for a company that books most revenue in USD but reports in KRW.

---

## Risk Summary Matrix

| Risk Category | Primary Source | Severity (CLSA framing) |
|---|---|---|
| HBM3E 12-Hi qualification slippage (Nvidia/AMD) | Customer/technical | High — drives 2025 and 2026 numbers [1] |
| Foundry/LSI losses (-19% of OP) | Competitive (vs TSMC) | High — structural [3][10] |
| US revocation of China fab equipment waivers | Geopolitical | Medium-High; 37% DRAM / 30% NAND capacity exposed [12][13] |
| US export controls on HBM/AI chips to China | Geopolitical / Demand | Already hit 1Q25 (-50% HBM shipments) [4] |
| Tariff-driven 2H demand pull-back | Macro/Cyclical | Medium — partly priced in [5] |
| Memory cyclicality, Chinese supply additions | Cyclical | Medium — structural [9][11][13] |
| Smartphone/consumer electronics weakness | Macro/Demand | Medium — 5% cut already taken |
| KRW FX | Translation | Low-Medium [7] |

The bull-case rebuttal CLSA highlights is **valuation support** — the shares trade at ~0.9x forward book vs a 10-year average of 1.2x [2] — but valuation does not neutralize the execution risks above; it only limits the downside multiple.

---

**Sources**
[1] Samsung Electronics — O-PF (Weak 2Q but valuation support) — CLSA (11 Jun 2025) — 607961798LinqAlpha.PDF, HBM qualification paragraph
[2] Samsung Electronics — O-PF (Weak 2Q but valuation support) — CLSA (11 Jun 2025) — 607961798LinqAlpha.PDF, summary recap
[3] Samsung Electronics — O-PF (Weak 2Q but valuation support) — CLSA (11 Jun 2025) — 607961798LinqAlpha.PDF, Figure 16 (OP mix)
[4] Samsung Electronics — O-PF (Optimistic amid 2H uncertainties) — CLSA (30 Apr 2025) — 607957658LinqAlpha.PDF, 1Q ASP commentary
[5] Samsung Electronics — O-PF (Optimistic amid 2H uncertainties) — CLSA (30 Apr 2025) — 607957658LinqAlpha.PDF, demand pull-in
[6] Samsung Electronics — O-PF (Treading carefully amid uncertainties) — CLSA (29 May 2025) — 607960821LinqAlpha.PDF, 2nm foundry para
[7] Samsung Electronics — O-PF (Weak 2Q but valuation support) — CLSA (11 Jun 2025) — 607961798LinqAlpha.PDF, 2Q OP breakdown
[8] Samsung Electronics — O-PF (Weak 2Q but valuation support) — CLSA (11 Jun 2025) — 607961798LinqAlpha.PDF, HBM revenue table
[9] Samsung Electronics — O-PF (Treading carefully amid uncertainties) — CLSA (29 May 2025) — 607960821LinqAlpha.PDF, HBM supply tightness
[10] Samsung Electronics — Special Call (Investor Forum, Foundry session) — earnings_call transcript
[11] Samsung Electronics — Special Call (Investor Forum, Memory session) — earnings_call transcript
[12] Korea Memory sector outlook (Potential restrictions on China fabs) — CLSA (22 Jun 2025) — 607962512LinqAlpha.PDF, WSJ-cited paragraph
[13] Korea Memory sector outlook (Potential restrictions on China fabs) — CLSA (22 Jun 2025) — 607962512LinqAlpha.PDF, SEC DRAM capacity-by-region table

## Citations

- [10] **Samsung Electronics Co., Ltd. - Special Call** · external
- [11] **Samsung Electronics Co., Ltd. - Special Call** · external

