
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
10 hours ago
- Korea Herald
Battle-tested duo leads Seoul into high-stakes tariff talks with Washington
"Korea is back," says new Trade Minister Yeo Han-koo, pledging swift action on US tariff talks With the July deadline for the US tariff reprieve approaching, South Korea is ramping up preparations for make-or-break tariff negotiations, placing two seasoned negotiators at the forefront in a bid to deliver a breakthrough. Described by many observers as one of the most qualified experts, Yeo Han-koo, who most recently served as a senior fellow at the Peterson Institute for International Economics in Washington, took office as the new trade minister on Thursday. This marks his second time serving as Korea's top trade envoy, following his previous tenure during the Moon Jae-in administration from 2021 to 2022. In 30 years of public service, Yeo has sat at the bargaining table for numerous trade deals, including the Regional Comprehensive Economic Partnership, the Korea-EU FTA, and others. Backing Yeo is Kim Hyun-chong, deputy national security adviser under the Moon administration and a two-time trade minister. He is widely expected to be named special adviser to the president for foreign affairs and national security. In this advisory role, Kim is expected to leverage his extensive trade expertise while providing the president with broader strategic insights. During President Lee Jae-myung's campaign, Kim served as an adviser on foreign affairs and national security. In May, he visited Washington to meet with Trump officials to discuss tariff and trade-related issues. Known for a candid and straightforward style, Kim played a pivotal role in negotiating South Korea's free trade agreements with over 40 countries during the Roh Moo-hyun administration. He served again as a chief trade negotiator under Moon, further cementing his reputation as a skilled diplomatic negotiator. The two men previously worked closely together during the renegotiation of the Korea-US FTA and steel tariffs during the first Trump administration, with Kim as trade minister and Yeo as commercial attache at the Korean Embassy in Washington. At that time, Korea was able to secure a duty-free import quota for steel products, receiving exemptions from US steel tariffs. Given the duo's track record and deep ties in Washington, expectations are high that Seoul could bolster its negotiating power and break the deadlock in tariff talks, which have been moving slowly due to a leadership vacuum in Korea. There's not much time before the July 8 deadline. The Trump administration imposed 25 percent 'reciprocal' tariffs on all imports from South Korea in April. Unless a new trade deal is reached, tariffs will jump from the current 10 percent to 25 percent when the 90-day grace period expires, which will deal a blow to the export-dependent South Korean economy. In light of this urgency, Yeo, at his inauguration ceremony held at the government complex in Sejong on Thursday, said he will 'expedite the 'shuttle negotiations' with the US at the trade minister level," noting that the new government in Seoul has secured democratic legitimacy and a clear mandate. He added that the ministry will establish an all-out response system for trade negotiations with the US, expanding and restructuring the existing task force to encompass trade, industry and energy issues. The rank of Korea's working-level representative will also be elevated from the current director level to the deputy minister level. Through this effort, the government will 'establish a new structural framework for mutually beneficial Korea-US cooperation in industry, trade and investment over the next five years,' Yeo said. 'I will do my best to achieve a nation-oriented, pragmatic outcome in trade talks,' he added. "Korea is back," said Yeo, striking a confident tone. "As much as South Korea needs the US, the US also needs Korea. We will negotiate confidently to build a mutually beneficial partnership." Negotiations are expected to intensify in the coming weeks, with a third round of technical talks expected this month. These talks are set to address issues including trade imbalances and non-tariff barriers. Seoul has been pushing for reduced tariff rates or exemptions through a comprehensive deal covering both tariffs and broader economic cooperation. Compounding the tariff issue, non-tariff barriers have emerged as a key sticking point in the bilateral talks. The US Trade Representative has particularly flagged Korea's restrictions on imports of US beef from cattle over 30 months old and regulations on the overseas transfer of high-precision mapping data. In preparing for the negotiations, the industry ministry has commissioned a state-run think tank to conduct economic impact studies analyzing the effects of the tariffs and anticipated US demands.


Korea Herald
10 hours ago
- Korea Herald
Naver to debut 'AI Tab' next year for smarter, task-based search
Naver on Thursday announced plans to roll out a new AI-powered search interface dubbed the 'AI Tab' next year, marking a major step in its evolution from keyword-based queries to interactive, task-completing search experiences. Unveiled during a press briefing in Seoul earlier in the day, the AI Tab is designed to provide users with multi-turn conversational capabilities, enabling them to complete complex tasks, such as trip planning, real-time schedule changes and reservations, without leaving the search interface. 'For example, if a user searches for 'places to visit in Jeju Island with a 5-year-old,' the AI Tab will deliver personalized recommendations via a place agent, suggest optimized routes using Naver Maps and handle bookings, all in one flow,' said Kim Jae-yeop, leader of intelligent search X at Naver Search Platform. The upcoming feature builds on Naver's strengths in vertical search, such as shopping, finance and local information, and leverages its proprietary large language models trained on localized Korean data. 'As one of the few global search companies with full control over both infrastructure and content, Naver is uniquely positioned to redefine AI search for Korean users,' said Kim Sang-bum, head of AI search. The company also introduced its broader vision of 'integrated agents' that can interpret user intent and act on it. These agents will be deployed across the unified search experience, with the AI Tab serving as the dedicated interface for the most advanced interactions. While Naver is increasing investments in infrastructure and model development, it is also weighing how to manage access to its content by external AI platforms. Asked whether ChatGPT could access Naver data, Kim said the company was 'carefully considering' its approach amid ongoing changes in the AI ecosystem. With the launch of the AI Tab, Naver aims to offer an experience that is not just accurate but also personal, seamless and action-oriented, setting a new benchmark for AI-driven search.


Korea Herald
15 hours ago
- Korea Herald
Seoul shares open higher on extended foreign buying
South Korean stocks opened higher Thursday, set for a weeklong rally, on the back of a foreign buying binge amid uncertainties. The benchmark Korea Composite Stock Price Index rose 16.71 points, or 0.57 percent, to 2,923.75 in the first 15 minutes of trading. The KOSPI had risen for a sixth consecutive session to hit a three-year high the previous session. Overnight, Wall Street closed lower amid heightened security risks in the Middle East seen in the United States' plan to partially evacuate its embassy in Iraq and an absence of details on the US-China trade negotiations held earlier this week. High-level officials from Washington and Beijing held talks in London for two days through Tuesday, where they agreed on a possible trade framework that could resolve trade disputes between the two countries. The officials planned to take the matter to their leaders, US President Donald Trump and Chinese leader Xi Jinping, for approval, but many specifics of the deal still remain unclear. In Seoul, tech behemoth Samsung Electronics shed 0.17 percent, while its chipmaking rival SK hynix jumped 2.6 percent. Top automaker Hyundai Motor went up 1.24 percent and its sister Kia climbed 1.65 percent. Defense giant Hanwha Aerospace advanced 1.99 percent and major nuclear power plant manufacturer Doosan Enerbility soared 5.28 percent. Leading shipbuilders also kicked off strong, with Hanwha Ocean surging 4.41 percent and HD Hyundai Heavy rising 0.48 percent. Samsung Biologics, however, dipped 1.15 percent. The local currency was trading at 1,368.5 won against the greenback at 9:15 a.m., up 6.5 won from the previous session. (Yonhap)