
Samsung Electronics beats Q1 estimates, but chip woes persist
Chip division posts third straight decline as tech giant braces for potential US tariffs
Samsung Electronics on Wednesday reported a stronger-than-expected earnings for the first quarter, buoyed by robust sales of its AI-enhanced Galaxy S25 smartphones, even as its key chip division continues to tumble.
For the January-March period, the tech giant posted an operating profit of 6.69 trillion won ($4.69 billion), up 1.2 percent from a year earlier. The figure exceeded analysts' expectations, which had hovered in the 5 trillion-won range.
Revenue for the quarter came to 79.14 trillion won, up 10.05 percent on-year, marking an all-time quarterly high. Net profit climbed 21.7 percent to 8.22 trillion won from the same period last year.
The upbeat results came despite persistent woes in the critical semiconductor segment. The company's chip division, the Device Solutions unit, posted an operating profit of 1.1 trillion won, down 0.8 percent on-year, and marked the third consecutive quarter of declining performance. Its sales slumped 17 percent to 25.1 trillion won, due to a drop in sales of the key high-bandwidth memory chips.
While demand for DRAM and NAND sales improved during the period as customers anticipated a price rebound, the overall gains were dampened by weak HBM sales, which were impacted by US export controls on AI chips.
In a conference call, Kim Jae-joon, executive vice president of the DS division, told investors that the company is expected to see its sales rebound as it expands the supply of improved 12-layer HBM3E AI chips to clients.
'We have completed supplying samples of the improved HBM3E products to our major clients, and we expect to see more companies purchase from the second quarter,' Kim said. 'Sales of HBM have hit bottom in the first quarter, but are expected to recover gradually, quarter by quarter.'
Samsung is still waiting to secure Nvidia's green light for its HBM chips -– a critical component for the GPUs that power generative AI systems like ChatGPT. Samsung's failure to secure an earlier edge against its smaller crosstown rival SK hynix has continued to weigh on its earnings and wiped out billions of dollars of market value last year.
The company's struggling contract chip manufacturing, or foundry unit, underperformed due to weak seasonal demand, especially in mobile phones, and client inventory adjustment and stagnant fab utilization.
Meanwhile, the company's Device Experience division, responsible for smartphones, mobile devices, TVs and other consumer electronics, saw its sales jump 28 percent on-year to 51.7 trillion won and an operating profit of 4.7 trillion won.
Leading the sales was the mobile business, which alone posted 37 trillion won in sales and 4.3 trillion won in operating profit. The Galaxy S25 series, which was launched in February, has set a new domestic record by surpassing 1 million units sold in the shortest time for any Galaxy model in South Korea.
Looking ahead, company executives expressed caution as the US tariffs could pose uncertainty for its chip businesses and smartphone components.
'We are closely monitoring trade policies in key markets and maintaining close communication to minimize negative impact,' Park Soon-cheol, Samsung's chief financial officer, told investors during a conference call. 'We will make the most of our global production base and customer management capabilities to respond swiftly as needed.'
Park acknowledged the challenges of scenario planning amid rapidly changing tariff policies and geopolitical tensions.
To minimize exposure, Park said Samsung will consider relocating production of certain home appliance volumes, while expanding premium product lines. He also added that if tariffs are imposed on semiconductors, the mobile division will offset potential price hikes by expanding its flagship and new Edge model sales.
'As for the DS division, we will closely monitor the direction of the US semiconductor tariff policy and continue to review response plans based on various scenarios,' he said.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


Korea Herald
2 hours ago
- Korea Herald
Foreign investors fuel Kospi rally with $2.2b buying spree
Foreign investors have poured roughly 3 trillion won ($2.2 billion) into the nation's benchmark Kospi so far this month, helping to drive a strong bullish run in the local stock market. Offshore investors net purchased shares worth 3.14 trillion won on the Kospi through Monday, continuing the buying spree that began in May, according to data from the Korea Exchange, the nation's bourse operator. In May, foreign investors net bought 1.16 trillion won worth of Kospi shares, turning to buying for the first time since August 2024. The rally continued on Tuesday, with foreign investors purchasing an additional 390 billion won worth of shares on the Kospi as of 2 p.m., pushing the index to 2,867.62 — up 11.85 points, or 0.41 percent, from the previous session. The buying momentum has been partly fueled by growing expectations of political stability and reform following President Lee Jae-myung's election victory last week. 'With the inauguration of the Lee Jae-myung administration, expectations for revisions to the Commercial Act and efforts to address the 'Korea Discount' have stimulated foreign investor inflows,' said Lee Kyoung-min, an analyst at Daishin Securities. 'Protection of minority shareholder rights and improvements in corporate governance — longstanding demands from global investors — remain key themes. Foreign investment flows into the Korean stock market have clearly improved against this backdrop of policy-driven optimism and attractive valuations.' Amid the offshore buying spree, shares of market bellwether Samsung Electronics rose as high as 60,400 won during intraday trading on Monday, surpassing the 60,000 won threshold for the first time since March 28. The stock later pared its gains, trading at 59,250 won as of 2 p.m. Tuesday. The Kospi has emerged as the best-performing major stock market worldwide over the past week, outpacing key global indices such as Hong Kong's Hang Seng, Denmark's OMX Copenhagen 25, and Japan's Nikkei 225, according to a list of major world market indices compiled by financial platform While not exhaustive, the list features selected stock indices of significant size and market value. Year-to-date, the Kospi has risen 19.36 percent, ranking as the eighth-best performer globally. It trails Poland's WIG 20 index — the top performer so far this year — which has surged 24.67 percent, placing the Kospi roughly five percentage points behind.


Korea Herald
4 hours ago
- Korea Herald
President Lee likely to meet chaebol chiefs ahead of G7
President Lee Jae-myung is expected to meet with the heads of top conglomerates and major economic organizations later this week to review economic issues ahead of his trip to Canada for the Group of Seven summit. According to industry sources on Tuesday, the presidential office is coordinating a meeting as early as Thursday or Friday. Final details and participants are yet to be confirmed. The chiefs of the top five chaebols are expected to attend, including Samsung Electronics Chair Lee Jae-yong; SK Group Chair Chey Tae-won, who heads the Korea Chamber of Commerce and Industry; Hyundai Motor Group Executive Chair Chung Euisun; LG Group Chair Koo Kwang-mo and Lotte Group Chair Shin Dong-bin. Leaders of major business lobbies are also expected to join, including Ryu Jin, chair of the Federation of Korean Industries; Sohn Kyung-shik, chair of the Korea Enterprises Federation; Yoon Jin-sik, chair of the Korea International Trade Association; Kim Ki-moon, chair of the Korea Federation of SMEs; and Choi Jin-shik, chair of the Federation of Middle Market Enterprises of Korea. The gathering appears to be aimed at assessing both domestic and global economic trends and listening to the concerns of the business community, especially ahead of President Lee's attendance at the G7 summit in Alberta, Canada, from June 15-17. While South Korea is not a G7 member state, it has been invited to the expanded sessions in recent years. On the sidelines of the summit, Lee may hold bilateral talks with US President Donald Trump and Japanese Prime Minister Shigeru Ishiba. A trilateral summit between the three could also take place. President Lee has made economic recovery his top priority and formed an emergency economic task force on his first day in office. The upcoming meeting with leaders of chaebols and business lobbies is expected to cover strategies to boost domestic investment and stimulate the local economy. The discussions could also touch on growing concerns over US tariffs and their impact on South Korea's export-dependent industries.


Korea Herald
6 hours ago
- Korea Herald
Digital gifting was convenient — until it started to feel like new social obligation
'Too easy to ignore': Korean Gen Z on the perks and pressures of online gifting culture Twenty-three-year-old Kim begins her day the way many young Koreans do — by checking her phone. As she scrolls through unread messages on the messenger app KakaoTalk, a small gift icon appears next to an old classmate's profile. It's his birthday. Kim hesitates. They haven't spoken in over a year, but she remembers he sent her a delivery food coupon last fall. After a moment of deliberation, she returns the gesture with a Starbucks "gifticon" of equal value. That tiny icon, built into Korea's most-used messaging app, is part of KakaoTalk Gifts, a feature that lets users send anything from coffee coupons to luxury goods. Among the most popular offerings are gifticons — digital vouchers redeemable for specific items like beverages or desserts. This isn't a fringe phenomenon. According to Kakao, the company's prepaid commerce balance, or money preloaded for gift-related purchases, reached 96.6 billion won ($74 million) in the fourth quarter of 2024, a 3.5-fold increase from a year before. Nationwide, e-coupon services, including gifticons, formed a market worth 8.6 trillion won in the same year. With the rise of these services, digital gift-giving has evolved into a kind of social currency, especially for Generation Z, or those born from 1997 to 2012. In a survey of 100 Koreans in their 20s active on social media, conducted by The Korea Herald this year, over 90 percent reported using online gifting platforms. Nearly 97 percent cited convenience as the top reason. Twenty percent said they spend between 30,000 to 50,000 won each month on digital gifts, while another 20 percent spend up to 70,000 won — roughly equivalent to a full day's work on minimum wage. 'It's really just a digital extension of what we already do,' said Kim, 26, who recently graduated from university. 'My family gives and receives envelopes for Seollal, for Chuseok, for weddings, for first birthdays. We've always had a give-and-take culture.' What's changed, she said, is how automated and accessible it's become. 'Kakao will send you reminders. 'Don't forget to celebrate!' Then it shows you a perfectly curated list of gifts. Rice cakes, cake sets, bubble tea … all just a click away.' Trapped by politeness But many also admit that the act no longer feels optional. 'The gift option makes it weird to just congratulate someone's birthday with words,' said Jeon, 25, a bartender in Seoul. 'There's this silent expectation. If you don't send something, it feels like you're being cold — even if you're just not that close anymore.' Jeon shared that she's sometimes felt 'held hostage by politeness,' especially when the recipient is someone she no longer has a meaningful connection with. 'I once got a Baskin-Robbins coupon from a girl I hadn't seen since high school. I appreciated it, but then I felt guilty. Her birthday came two months later, and I ended up sending her something back, even though we hadn't talked in years.' Twenty-nine-year-old Kim, a graduate student juggling classes and part-time work, said the absence of a 'no thanks' button makes it worse. 'You either ghost the message, which feels rude, or accept that you owe them.' Kim added that the emotional toll doesn't end with the gift itself. 'If someone gives me a coupon, I feel like I have to reply, thank them, keep the conversation going ... even if we're not actually close. It's not friendship — it's etiquette.' Park, 25, a user experience design student, described it as a cycle of guilt. 'You want to stop, but then you remember they sent you something last year. I've definitely sent coffee coupons out of guilt.' Some even confessed to 'strategic gifting' — sending small tokens to maintain surface-level connections or avoid awkward silences. 'It's emotional labor,' Park said. 'But instead of doing it in person, we're doing it through vouchers.' Park, 28, recently returned to college after military service and a gap year. As an unpaid intern preparing for graduate school, he finds the economics of gift-giving difficult to justify. 'Most of the gifts my friends wish for are things like convenience store sets, desserts or drink coupons,' he said. 'One item doesn't cost much, but when you have 20 friends ... it adds up.' Park sometimes scrolls through friends' Kakao profiles to check their wish lists, trying to find gifts that look meaningful but cost less. 'It's like tactical generosity,' he said, laughing. 'I want to seem thoughtful, but I'm broke.' He added that digital gifts also create a strange kind of visibility. 'Everyone sees that you didn't send something. You start comparing. Did this friend get more? Did I forget someone?' New rules for digital giving? As gifting continues to digitize, some Gen Z Koreans are beginning to question the expectations surrounding it. A few are starting to set personal rules: no reciprocal gifts, limits on birthday spending or silent 'likes' instead of presents. 'I've started replying with a message instead of a gift,' said Jeon. 'Sometimes I say, 'Let's grab coffee in person next time.' If they're real friends, they'll understand.' Others are trying to step back from gifting altogether. 'I told my close friends: no gifts this year. Let's just meet,' said Kim. 'Honestly, that made us closer.'