Samsung Electronics posted a strong 21.7% increase in net profit for the first quarter of 2025, driven mainly by strong sales of its new Galaxy S25 phones. Meanwhile, its chip business remained under pressure.
In a Wednesday regulatory filing, the Seoul-based tech firm reported a quarterly net profit of 8.22 trillion won ($5.7 billion), compared with 6.75 trillion won last year. The figure was higher than market forecasts, with Yonhap Infomax estimating a more modest estimate of 5.17 trillion won.
Operating profit increased marginally by 1.2% from the previous year to 6.68 trillion won, and revenue grew 10% to an all-time high of 79.14 trillion won, Samsung's largest quarterly sales ever.
The firm credited the improved performance to solid traction in its mobile business. The Device eXperience (DX) unit, which comprises smartphones, TVs, and home appliances, recorded 28% year-over-year revenue growth to 51.7 trillion won, with operating profit of 4.7 trillion won. Smartphone business alone contributed 37 trillion won in revenue and 4.3 trillion won in operating profit, with major gains fueled by the successful roll-out in January of the Galaxy S25 series.
Contrarily, the semiconductor business languished with a 17% drop in sales to 25.1 trillion won and 1.1 trillion won in operating profit. The firm attributed disappointing performance in its high-bandwidth memory (HBM) segment as the primary factor for the slowdown.
In the future, Samsung was upbeat on a cautious note for the second half of 2025. "Assuming that the uncertainties are reduced, the company expects its performance to improve in the second half of the year," the company said in its earnings statement.
The firm is relying on growing world demand for artificial intelligence servers and on-device AI solutions to resuscitate its memory business. Plans are in place to bolster its portfolio with next-generation memory offerings, such as 12-layer HBM3E and LPDDR5X products.
On the mobile side, Samsung looks to keep the pace going with the release of the Galaxy S25 Edge in June and a new series of foldable Galaxy Z phones in July.
Samsung also announced that it is negotiating with customers on its sixth-generation HBM4 chips, which it will start mass-producing in Q2. The company has termed HBM4 a potential "game changer" in the high-performance memory market, where SK hynix currently dominates.
Talking about wider market issues, Samsung CFO Park Soon-cheol said in an earnings call, "It is difficult to forecast the business climate and prepare responsive strategies in the face of increasing uncertainties driven by unpredictable U.S. tariff policies and geopolitical tensions. We will handle any situation by taking advantage of our global production networks and customer management capabilities."
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