Samsung Electronics has reported a surprisingly strong first-quarter profit, easing fears of a sharper decline. The tech giant’s operating profit for January to March 2025 is estimated at 6.6 trillion won ($4.49 billion), slightly lower than the same period last year but significantly better than analysts’ expectations of 5.1 trillion won. This performance is largely due to robust memory chip sales and strong demand for smartphones, both of which were driven by concerns over potential U.S. tariffs.
The company’s memory chip sales, especially in consumer devices and AI chips, surpassed expectations. Analysts believe that customers rushed to stockpile chips in anticipation of U.S. tariffs on semiconductors. This surge in chip demand helped Samsung maintain a steady performance despite a dip in memory prices. “Strong demand from customers looking to secure inventory ahead of potential U.S. tariffs helped boost Samsung’s memory chip shipments, supporting overall performance,” said Greg Roh, head of research at Hyundai Motor Securities.
Samsung’s smartphone sales were also a major contributor to the positive results, particularly the launch of its Galaxy S25 models, which feature advanced AI capabilities. These AI features are expected to give Samsung an edge in the competitive smartphone market, especially against rivals like Apple and Chinese manufacturers. Moreover, the preemptive shipments by North American customers, anticipating tariffs, further bolstered Samsung’s first-quarter numbers.
Following the earnings announcement, Samsung’s shares rose by 2.6%, outperforming the broader market, which saw a 1.6% increase. The company is currently undergoing leadership changes after the sudden death of co-CEO Han Jong-Hee in March 2025. A detailed financial report is expected on April 30, 2025, which will offer further insights into the company’s future outlook.
Despite the strong first-quarter results, analysts remain cautious about Samsung’s performance in the second quarter. While demand for memory chips and smartphones was high in the first quarter, analysts predict that shipments could decline in the coming months.
This is partly due to the stockpiling behavior seen in the first quarter, which could lead to a slowdown in demand in the second quarter. Additionally, delays in securing new customers for Samsung’s high-bandwidth memory (HBM) chips may contribute to a weaker outlook.
Samsung’s chip division is also facing challenges due to U.S. export restrictions on AI chips to China, the company’s top market. Although Samsung has been working to recover from these setbacks, its profits from the foundry business, which involves making chips for clients like Nvidia, Qualcomm, and AMD, may not be enough to offset losses from other areas. The foundry business has been struggling with lower demand, leading to a possible drop in overall chip division profits.
Looking ahead, Samsung remains optimistic about its second-half recovery. The company plans to start supplying its new HBM3E 12-high chips to Nvidia by mid-2025, which is expected to boost earnings in the latter half of the year. However, like other memory chipmakers, Samsung faces uncertainty due to the ongoing trade tensions and tariff concerns, which could impact future sales.
Despite these challenges, Samsung is well-positioned to continue its strong performance, driven by the growing demand for AI chips and smartphones. Analysts are hopeful that the company’s efforts to diversify its business and invest in new technologies will help maintain its competitive edge in the global tech industry.
