Samsung sees Q1 profit beating estimates as looming tariffs spur chip, phone sales
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As a result of buyers stocking up in the first quarter, analysts said shipments are likely to decline in the second quarter.
PHOTO: AFP
SEOUL – Samsung Electronics on April 8 flagged a much smaller-than-feared 0.2 per cent drop in first-quarter operating profit, boosted by solid memory chip sales and strong smartphone demand, partly driven by customers concerned about US tariffs.
Sales of conventional memory chips used in consumer electronic devices such as smartphones, as well as its artificial intelligence (AI) chips, likely came in better than expected, with some customers stockpiling chips ahead of potential US tariffs on semiconductors, analysts said.
The world’s largest memory chipmaker estimated an operating profit of 6.6 trillion won (S$6.1 billion) for the January to March period, versus a 5.1 trillion won LSEG SmartEstimate.
That would compare with 6.61 trillion won in the same period in 2024 and 6.49 trillion won in the preceding quarter.
“While general memory prices dipped, strong demand from customers looking to secure inventory ahead of potential US tariffs helped boost Samsung’s memory chip shipments, supporting overall performance,” said Greg Roh, head of research at Hyundai Motor Securities.
Samsung, reshuffling its top ranks following the sudden death of co-chief executive officer in March, is expected to release detailed results on April 30.
Second quarter seen weaker
US President Donald Trump on April 2 announced sweeping tariffs on trading partners, including China. While semiconductors were exempted from reciprocal tariffs, Mr Trump on April 3 reiterated plans to levy tariffs on chips very soon.
Mr Roh said Samsung’s AI features in the Galaxy S25 smartphone models helped drive strong sales, adding that preemptive smartphone shipments by North American customers ahead of the tariffs likely contributed to first-quarter results.
As a result of buyers stocking up in the first quarter, analysts said shipments are likely to decline in the second quarter.
South Korea’s SK Hynix the world’s second-largest memory chipmaker, said in March some customers have brought forward orders in preparation for new US tariffs, but was wary of counting on a sustained demand recovery.
Kim Sun-woo, a senior analyst at Meritz Securities, said Samsung’s second-quarter operating profit could stagnate also due to delays in securing new customers for high-bandwidth memory (HBM) chips.
Analysts estimated that Samsung’s chip division profit might have halved to about 800 billion won in the first quarter from a year earlier, as losses in the foundry business likely offset profits from the memory chip business.
The foundry business involves making chips on a contract basis for customers such as Nvidia, Qualcomm and AMD.
At a shareholder meeting in March, Samsung executives apologised for the company’s poor share price stemming from its late response to the booming AI chip market. They expected chip earnings to recover in the second half on demand for smartphones and data centre, and as it aims to start supplying its improved HBM3E 12-high chips to Nvidia in the middle of this year. REUTERS
