(2nd LD) Samsung Electronics Sees 21.7% Rise in Q1 Profits: Mobile Sales Surge Amid Chip Slowdown

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(2nd LD) Samsung Electronics - Q1 Earnings

SEOUL, April 30 (Yonhap) -- On Wednesday, Samsung Electronics announced that its net profit for the first quarter increased over 20% compared to the previous year, thanks largely to robust sales of their latest Galaxy S line of smartphones. However, the company’s primary semiconductor division continued to struggle.

In a regulatory submission, the firm reported a net income of 8.22 trillion won (US$5.7 billion) for the January-March quarter, marking an increase of 21.7% compared to 6.75 trillion won during the same timeframe the previous year.

The profits surpassed market expectations. Analysts had forecast an average net income of 5.17 trillion won, as per a survey conducted by Yonhap Infomax, which is the financial information division of Yonhap News Agency.

The operating profit reached 6.68 trillion won, showing a rise of 1.2 percent compared to the previous year, whereas the revenue climbed by 10 percent to hit 79.14 trillion won, setting a record for the highest quarter earnings ever.

Samsung Electronics credited the higher-than-predicted profit to strong sales from its smartphone division. The company’s newest Galaxy S25 phones were launched in January.

The DX segment, encompassing mobile, television, and home appliance operations, experienced a significant surge in sales of 28 percent year-over-year, reaching 51.7 trillion won, accompanied by an operating profit of 4.7 trillion won.

Specifically, the mobile division reported sales of 37 trillion won and an operating profit of 4.3 trillion won.

Nevertheless, the semiconductor division’s sales dropped by 17 percent to reach 25.1 trillion won, recording an operating profit of only 1.1 trillion won, primarily because of poor performance in the high-bandwidth memory (HBM) market.

Even though sales of dynamic random-access memory (DRAM) and NAND increased due to rising market prices, these improvements were counterbalanced by weak HBM sales. This decline was influenced by U.S. export limitations on AI chips as well as postponed purchases before the release of newer HBM3E products.

The fabless sector, also known as System LSI, experienced moderate expansion, primarily fueled by higher deliveries of advanced resolution image sensors and logical components. Conversely, the foundry segment, which involves outsourced production, faced challenges attributed to reduced mobile device demand during off-peak seasons, necessary stock corrections, and underutilization of fabrication facilities.

Samsung Electronics invested 9 trillion won into research and development during the first quarter, marking the highest expenditure ever recorded for that period.

Samsung Electronics stated that their profits might increase in the latter part of 2025 should global economic instabilities diminish.

"If the uncertainties decrease, the firm anticipates its performance will enhance during the latter part of this year," the statement read in a press release.

The firm expected increasing demand for AI servers along with on-device AI to fuel expansion in its memory sector.

To fulfill this requirement, Samsung Electronics intends to enhance its market position through advanced 12-layer HBM3E chipsets and high-end memory solutions like LPDDR5X.

For smartphones, Samsung Electronics plans to unveil the extremely slim Galaxy S25 Edge in June and introduce new models of their folding Galaxy Z series in July to keep up their forward progress.

Samsung Electronics' shares dropped by 0.36 percent, trading at 55,600 won on the primary Seoul stock exchange as of 10:30 a.m., while the overall KOSPI index decreased by 0.37 percent.

brk@yna.co.kr

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