The Great Samsung Divide: Bulls vs Bears
Samsung Electronics’ (KRX: 005930) alarming 21% year-over-year operating profit collapse to ₩6.3 trillion ($4.6 billion) has triggered one of the most polarized Wall Street reactions in recent memory, with top analysts delivering radically different verdicts on whether this represents a buying opportunity or the start of a structural decline.
The Damage Report
Q1 2025 Key Metrics vs Expectations:
| Metric | Reported | Estimate | Variance |
|---|---|---|---|
| Revenue | ₩67.4T | ₩69.1T | -2.5% |
| Operating Profit | ₩6.3T | ₩7.1T | -11.3% |
| Semiconductor Profit | ₩2.1T | ₩3.0T | -30% |
| Foundry Losses | (₩920B) | (₩600B) | +53% |
Critical Failures:
- AI Chip Debacle
- Produced only 40,000 HBM3 units/month vs SK Hynix’s 90,000
- Lost 3 major NVIDIA orders worth $1.8B to Micron/SK Hynix
- HBM3E qualification delayed to Q3 (vs Q1 for competitors)
- Foundry Crisis
- 3nm defect rate stuck at 49% (TSMC at 28%)
- Qualcomm moved 70% of Snapdragon 8 Gen4 orders to TSMC
- Mobile Miscalculation
- Galaxy S25 delayed by 11 weeks due to AI chip shortage
- Foldable phone sales missed targets by 23%
The Bull Case (35% of Analysts)
Morgan Stanley (Overweight, ₩85,000 Target): “This is a cyclical trough, not structural decline. Three catalysts ahead:”
- DRAM Supercycle: Prices projected to rise 35% in 2025
- 2nm Breakthrough: Samsung’s Gate-All-Around tech could steal Apple’s A18 Pro orders from TSMC
- Buyback Boost: New $10B repurchase program (7% of float)
UBS (Buy, ₩82,000): “Foundry losses peaked – look for:”
- Texas 4nm fab coming online in Q4 ($4B/year savings)
- Samsung-Hyundai auto chip JV to offset mobile weakness
Technical Perspective:
- Stock now trades at 1.3x P/B (10-year low)
- Dividend yield spikes to 3.8%
The Bear Case (65% of Analysts)
Goldman Sachs (Sell, ₩72,000): “Five irreversible red flags:”
- AI Chip Gap: 18-month tech lag vs SK Hynix in HBM4
- TSMC Lock-In: Apple/AMD/NVIDIA now 89% TSMC for advanced nodes
- Chinese Risk: 28% of memory sales exposed to Huawei sanctions
- Mobile Erosion: Chinese brands took 7% global share in Q1
- Leadership Flux: 3 semiconductor execs resigned post-earnings
Bernstein (Underperform, ₩68,000): “The math doesn’t lie:”
- Every 1% drop in DRAM margins cuts EPS by ₩1,200
- Foundry needs $20B capex just to catch TSMC
Smart Money Moves
What Institutions Are Doing:
- BlackRock: Increased position by 2.4M shares (betting on buyback)
- Norway Wealth Fund: Sold 8.3M shares (governance concerns)
- Citadel: Buying Jan 2026 ₩100,000 calls (volatility play)
Retail Investor Guide:
| Strategy | ETF | Risk Level |
|---|---|---|
| Conservative | EWY (Korea ETF) | Medium |
| Aggressive | Samsung 005930 KS | High |
| Hedge | SOXL (Leveraged Semis) | Very High |
The Make-or-Break Timeline
2025 Catalysts to Watch:
- May 15: HBM3E qualification results
- June 3: TSMC 2nm test chip comparison
- Aug 28: Galaxy S25 launch (or delay confirmation)
- Nov 10: U.S. CHIPS Act funding decision
