Samsung Electronics Q1 net profit up 21.7 pct on mobile sales; chips sluggish

Samsung Electronics Co. said Wednesday its first-quarter net profit rose more than 20 percent from a year earlier, driven by strong sales of its new Galaxy S series smartphones, but its flagship semiconductor business remained sluggish.

In a regulatory filing, the company posted a net income of 8.22 trillion won (US$5.7 billion) for the January-March period, up 21.7 percent from 6.75 trillion won a year earlier.

The earnings exceeded market expectations. The average estimate of net profit by analysts stood at 5.17 trillion won, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.

Operating profit stood at 6.68 trillion won, up 1.2 percent from a year ago, while revenue rose 10 percent to 79.14 trillion won, marking an all-time quarterly high.

Samsung Electronics attributed the larger-than-expected bottom line to robust sales of the smartphone business. Its latest Galaxy S25 smartphones debuted in January.

Its DX division, which includes mobile, TV and home appliances businesses, saw its sales jump 28 percent on-year to 51.7 trillion won, with 4.7 trillion won in operating profit.

In particular, the mobile business alone posted 37 trillion won in sales and 4.3 trillion won in operating profit.

However, sales of the company’s chip division sank 17 percent to 25.1 trillion won, with 1.1 trillion won in operating profit, due to its lackluster performance in the high bandwidth memory (HBM) sector.

While dynamic random access memory (DRAM) and NAND sales improved amid a rebound in market prices, the gains were offset by sluggish HBM sales, affected by U.S. export restrictions on AI chips and delayed demand ahead of new HBM3E product launches.

The fabless division, or System Large Scale Integration (LSI), showed modest growth, driven by increased shipments of high-resolution image sensors and logic chips. In contrast, the foundry, or contract manufacturing, segment struggled due to seasonal weakness in mobile demand, inventory adjustments and low fab utilization.

Samsung Electronics spent 9 trillion won in research and development in the first quarter, the highest-ever for a first quarter.

Samsung Electronics said its earnings could improve in the second half of 2025 if global economic uncertainties ease.

“Assuming that the uncertainties are diminished, the company expects its performance to improve in the second half of the year,” it said in a release.

The company anticipated the growing demand for AI servers and on-device AI to drive growth in its memory business.

To meet this demand, Samsung Electronics plans to boost its competitiveness with upgraded 12-layer HBM3E chips and premium memory products, such as LPDDR5X.

In mobile, Samsung Electronics is set to launch the ultra-slim Galaxy S25 Edge in June and new foldable Galaxy Z series models in July to sustain momentum.

Shares of Samsung Electronics fell 0.36 percent to trade at 55,600 won on the main Seoul bourse as of 10:30 a.m., while the broader KOSPI fell 0.37 percent.