Samsung Electronics posted a modest rise in first-quarter operating profit, driven primarily by a rush in smartphone purchases ahead of potential U.S. tariffs. The South Korean tech giant’s mobile and network business emerged as the standout performer, hitting its highest profit in four years, even as the company’s AI chip segment continued to underperform.
In its earnings report on Wednesday, Samsung announced an operating profit of 6.7 trillion won (approx. $4.68 billion) for the quarter ending March, up 1.2% year-on-year. The results were in line with its earlier forecast of 6.6 trillion won.
The headline act was Samsung’s mobile division, which delivered an operating profit of 4.3 trillion won, a 23% year-on-year increase, thanks to robust sales of its latest Galaxy S series smartphones powered by artificial intelligence features. This marks the division’s best quarterly result since 2020.
A key factor in the mobile surge, according to industry insiders, was a spike in demand as consumers and distributors accelerated orders in anticipation of potential tariffs from the United States. With fears mounting over trade restrictions on goods made in countries like China, Vietnam and South Korea, Samsung increased smartphone output across Vietnam, India and South Korea to stay ahead of possible disruptions.
However, the good news for Samsung didn’t extend across all business units. Its semiconductor division posted a profit of just 1.1 trillion won, down 42% from the previous year. AI chip sales, particularly High Bandwidth Memory (HBM) products, were hit hard due to U.S. export controls on advanced chips to China, Samsung’s largest market. The company also lagged behind SK Hynix in supplying HBM chips to key U.S. clients like Nvidia.
Looking ahead, Samsung plans to scale production of its next-gen 12-layer HBM3E chips in the current quarter to regain ground in the AI server market. The company acknowledged macroeconomic uncertainty and global trade tensions, particularly U.S. tariff threats, as key challenges for the upcoming quarters.
Samsung’s total revenue for the quarter stood at 79.1 trillion won, up 10% from a year ago, again aligning with earlier estimates.
