Samsung sees modest profit growth despite US trade tensions

April 30, 2025 (MLN): South Korean tech giant Samsung Electronics reported a 1.2% rise in first-quarter operating profit, buoyed by strong smartphone sales, even as US trade tensions loom.

The firm is the flagship subsidiary of South Korean giant Samsung Group, by far the largest of the family-controlled conglomerates that dominate business in Asia's fourth-largest economy.

The world's largest memory chipmaker reported an operating profit of 6.68 trillion won ($4.6 billion) for the January-March quarter, up 1.2% on-year.

Sales rose 10% to 79.14tr won and net profit rose 21.7% to 8.22tr won on-year, exceeding forecasts according to Yonhap News Agency, which cited its own financial data firm.

The results comes as Seoul and Washington work to craft a "trade package" intended to roll back new US tariffs ahead of the July 8 expiration of a reciprocal tariff freeze, as APP reported.

South Korea, one of the United States' key trading partners and home to powerhouse chip and auto industries, earlier this month also unveiled an additional $5bn investment in its semiconductor industry, citing "growing demand."

Analysts attributed the better-than-expected first-quarter operating profit in part to record sales of the new Galaxy S25 series smartphone, which launched in February.

The firm's "early introduction of AI features, beginning with the Galaxy S24 and enhanced further in the S25, gave it a strong competitive edge," Sheng Win Chow, an analyst at Canalys, told AFP.

"The combination of native on-device AI capabilities and Google Gemini apps offered users a rich suite of AI functions right out of the box, creating strong pull factors for early adopters."

Despite more than a year of efforts to close the gap with South Korean rival SK hynix, Samsung has struggled to supply high volumes of high-bandwidth memory (HBM) chips to Nvidia, a leading player in the AI chip market.

Gloria Tsuen, a Moody's Ratings vice president and senior credit officer, said Samsung's "leadership in the semiconductor market had eroded over the last few years," especially in the "AI and high-end products in its memory segments".

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