Samsung executives warn of trade uncertainty as demand for chips softens
Executives at the chips-to-smartphones titan warned of heightened uncertainty for the rest of the year stemming from geopolitical tensions and US tariff policies.
Even before US president Donald Trump announced tariffs on almost all countries around the world, customers put some data centre projects on hold, weakening demand for Samsung's solid-state drives in the March quarter, an executive from the company's memory business told analysts. Samsung's total capital expenditure in the quarter fell more than 30pc from the previous quarter to 12 trillion won (€7.4bn).
The South Korean company's flagship products such as semiconductors, smartphones and tablets are now exempt from the so-called reciprocal tariffs, but Mr Trump has indicated that a tariff on the electronics supply chain including chips is in the works.
'There are a lot of uncertainties ahead of us,' said KL Roh, an executive vice president at Samsung.
Operating profit at Samsung's chip division tumbled 42pc to 1.1 trillion won due to declines in average selling price. Sales of its key high-bandwidth memory chips also fell due to export controls, with some clients also deferring orders in anticipation of upcoming enhanced HBM3E products, according to Samsung.
In recent high-profile trade talks, Seoul and Washington agreed to pursue a comprehensive package agreement by July 8, when the 90-day tariff pause is set to end.
Fears about what the final trade agreement would look like hang over Samsung's outlook, outweighing a boost from customers stockpiling PC chip supplies ahead of US tariffs and a recovery in smartphone sales.
Donald Trump Jr was in Seoul yesterday to meet with leaders of Korean conglomerates on the invitation of Shinsegae Group chairman Chung Yong-jin, underscoring escalating concern in the country's business community. Korean business leaders had asked Mr Chung to facilitate the visit to establish contact with the Trump administration, according to local reports.
Customers from Apple to Lenovo Group hastened shipments of consumer products to the US over the first quarter of the year to preempt tariffs. Samsung's own Galaxy S25 flagship smartphone series also buoyed earnings. That helped boost net income to 8.03 trillion won, above estimates.
But such one-time pre-tariff gains have done little to assuage concern about long-term demand. Analysts including Canalys see the first-quarter surge in shipments as an acceleration of deliveries from later in the year.
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