Strong Smartphone Sales Drive Overall Profitability

Samsung Electronics has reported a robust first quarter for 2025, wiht net profits reaching $5.74 billion, a notable 22% increase compared to the same period last year. This impressive figure not only surpasses analysts’ expectations but also represents a 6% improvement over the previous quarter.The surge in profitability is primarily attributed to the strong performance of its smartphone division, notably the Galaxy S25 series, which boasts advanced AI capabilities. This success has effectively offset challenges faced by the semiconductor segment.

The company’s overall turnover for the quarter reached $56.6 billion, with operating profit climbing by 1.2% to $4.78 billion.These figures exceed initial company estimates, signaling a strong start to the year despite ongoing global economic uncertainties.

Semiconductor Division Grapples with Trade Restrictions and HBM Competition

While the smartphone division thrived, Samsung’s semiconductor business experienced a downturn.Operating profit for this segment fell by 62% compared to the previous quarter, landing at $787 million, down from $2.07 billion. This decline is largely due to reduced sales of high-bandwidth memory (HBM) chips,impacted by U.S. export restrictions targeting China and increased competition. These restrictions limit the export of advanced chips to China, a crucial market for Samsung, which represented nearly a third of its turnover in 2024.

According to reports, rival SK Hynix recorded profits exceeding $5 billion during the same period, driven by growth in high-end AI chip production. This highlights Samsung’s current lag in providing leading-edge memory solutions for AI systems.

For memory activity, the total profits have been impacted by a drop in average selling prices, a drop in wide -banding memory sales (HBM) due to IA fleas export controls and a delay in demand due to the upcoming launch of the HBM3E product range.
Samsung press Release

Samsung anticipates a rebound in HBM chip sales in the second quarter, as they begin shipping HBM3E samples to customers and continue developing the more advanced HBM4 series. The company is actively working to regain its competitive edge in this critical market segment.

Navigating Trade Tensions and Tariffs

Samsung is actively addressing the challenges posed by international trade tensions and tariffs. The company is planning to relocate some of its television and household appliance production facilities to mitigate the impact of U.S. tariffs. South Korea is currently engaged in negotiations with the United States to reduce a reciprocal 25% tariff rate,which was temporarily suspended by the previous governance.

we are planning to minimize the impact of prices by moving part of the production of our VD (Visual display) and DA (Digital Appliances) activities, using global bases if necessary.
Park Soon-Cheol, Samsung Director

While specific details of the relocation plans remain undisclosed, reports suggest that most Samsung TVs sold in the U.S. are currently manufactured in Mexico, although the company operates a television manufacturing plant in California. For household appliances, Samsung utilizes manufacturing facilities in South Carolina and Mexico.

Looking Ahead: Foldable Phones and AI Integration

despite anticipating a seasonal decrease in smartphone demand in the second quarter, Samsung remains optimistic about the future.The company plans to launch a new generation of foldable smartphones in the second half of the year, further enhancing AI features to stimulate sales and maintain its strong position in the mobile market. The integration of AI into its devices is a key strategy for Samsung, as demonstrated by the success of the Galaxy S25 series.