Seoul: Samsung Electronics Co. announced a significant increase in its first-quarter net profit, which surged by 21.7% compared to the previous year, primarily due to robust sales of its new Galaxy S series smartphones. However, the company's semiconductor business experienced a downturn.
According to Yonhap News Agency, Samsung Electronics reported a net income of 8.22 trillion won (approximately US$5.7 billion) for the January-March period. This figure surpassed market expectations, as analysts had predicted an average net profit of 5.17 trillion won, based on a survey conducted by Yonhap Infomax, the financial data firm of Yonhap News Agency.
In terms of operational performance, the company's operating profit increased by 1.2% year-on-year to 6.68 trillion won, while revenue grew by 10% to reach an all-time quarterly high of 79.14 trillion won. The better-than-expected financial results were attributed to the strong performance of Samsung's smartphone division, with the release of the latest Galaxy S25 series in January.
The company's DX division, encompassing mobile, TV, and home appliances, experienced a 28% year-on-year sales increase, totaling 51.7 trillion won and generating 4.7 trillion won in operating profit. Notably, the mobile business alone accounted for 37 trillion won in sales and 4.3 trillion won in operating profit.
Conversely, the semiconductor division faced challenges, with sales declining by 17% to 25.1 trillion won, and operating profit at 1.1 trillion won. The downturn was primarily due to weak performance in the high bandwidth memory (HBM) sector, influenced by U.S. export restrictions on AI chips and delayed demand in anticipation of new product launches.
While there was an improvement in dynamic random access memory (DRAM) and NAND sales amid a market price rebound, it was not sufficient to offset the sluggish HBM sales. The System Large Scale Integration (LSI) division showed modest growth due to increased shipments of high-resolution image sensors and logic chips, whereas the foundry segment faced difficulties due to seasonal mobile demand weaknesses and low fab utilization.
Samsung Electronics invested 9 trillion won in research and development during the first quarter, marking a record-high for this period. The company is optimistic about improved earnings in the second half of 2025, contingent on a reduction in global economic uncertainties.
"Assuming that the uncertainties are diminished, the company expects its performance to improve in the second half of the year," Samsung Electronics stated in a release. The company also anticipates that rising demand for AI servers and on-device AI will bolster growth in its memory business.
To address this demand, Samsung plans to enhance its competitiveness with upgraded 12-layer HBM3E chips and premium memory products, including LPDDR5X. In the mobile sector, the company is preparing to launch the ultra-slim Galaxy S25 Edge in June and new foldable Galaxy Z series models in July to maintain its market momentum.