(2nd LD) Samsung Electronics Sees 21.7% Jump in Q1 Profits: Mobile Sales Soar as Chip Sector Lags

(2nd LD) Samsung Electronics - Q1 Earnings

SEOUL, April 30 (Yonhap) -- On Wednesday, Samsung Electronics reported that its net profit for the first quarter increased over 20% compared to the same period last year. This growth was mainly due to robust sales of their latest Galaxy S series phones; however, their leading 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 a rise 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 around 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, representing a 1.2 percent increase compared to the previous year, whereas the revenue climbed by 10 percent to hit 79.14 trillion won, setting a record for the highest quarterly figure ever.

Samsung Electronics credited the higher-than-anticipated profit margin 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 to reach 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.

Nonetheless, the semiconductor division's revenues plummeted by 17 percent to reach 25.1 trillion won, recording an operational profit of 1.1 trillion won. This decline was primarily attributed to underwhelming results in the high-bandwidth memory (HBM) market segment.

Even though dynamic random access memory (DRAM) and NAND sales saw an uptick due to recovering 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 deferred demand in anticipation of upcoming HBM3E product releases.

The fabless division, also known as System LSI, experienced moderate expansion, primarily fueled by higher deliveries of advanced resolution image sensors and logic components. Conversely, the foundry sector, which involves outsourced production, faced challenges attributed to reduced mobile market demands during off-peak seasons, necessary stock corrections, and underutilized 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 lessen, the company anticipates an enhancement in its performance 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 artificial intelligence to boost progress in its memory sector.

In order to address 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 release the extremely slim Galaxy S25 Edge in June and introduce new models of their folding Galaxy Z series in July to keep up their positive trend.

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 declined by 0.37 percent.

brk@yna.co.kr

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