Samsung Electronics Q1 Operating Profit 6.6 Trillion Won... Exceeds Market Expectations Due to Galaxy S25 Effect (Comprehensive)

Record High First-Quarter Sales at 79 Trillion Won
Strong Galaxy S25 Sales and Solid DRAM Shipments
Uncertainty Looms for Second Quarter Amid Tariff Concerns

Samsung Electronics recorded an operating profit exceeding 6 trillion won in the first quarter of this year. This significantly surpassed market expectations, which had initially anticipated around 5 trillion won. The Galaxy S25 model, the world's first artificial intelligence (AI) phone, received strong consumer response and showed robust sales, while DRAM shipments also performed well, driving the earnings. However, with the U.S. tariff bomb set to take full effect from this month, it is uncertain whether the strong first-quarter performance centered on smartphones will continue into the second quarter.

The view of Samsung Electronics Seocho Building in Seocho-gu, Seoul. Photo by Yonhap News

On the 8th, Samsung Electronics announced that its consolidated operating profit for the first quarter (January to March) of this year was tentatively estimated at 6.6 trillion won, a 0.15% decrease compared to the same period last year. Sales reached 79 trillion won, up 9.84% year-on-year. This is the highest ever for a first quarter and the second highest ever on a quarterly basis, following the third quarter of last year (79.1 trillion won).

This announcement is a preliminary result, and detailed breakdowns by business division were not disclosed. However, securities firms analyze that the Mobile Experience (MX) division, responsible for smartphones, likely posted an operating profit exceeding 4 trillion won. The MX division's Galaxy S25 series, released in February, achieved a domestic sales record of 1 million units in just 21 days, the shortest period among all Galaxy series.

The Device Solutions (DS) division, which handles the semiconductor business, is estimated to have recorded an operating profit around 1 trillion won. The foundry (semiconductor contract manufacturing) and System LSI divisions have not escaped losses, and a decrease in sales volume of High Bandwidth Memory (HBM) is expected to have significantly reduced operating profit.

However, recent trends in the Chinese market, a major sales destination for Samsung's memory products, appear to have partially offset losses in the DS division. Thanks to China's 'Yijiu Huanshin (以舊換新, support for replacing old products with new ones)' policy, smartphone demand increased by 15% compared to the same period last year, leading to higher-than-expected demand in memory-related upstream industries and a significant improvement in memory inventory. Additionally, proactive increases in shipment volumes in preparation for the Trump administration's 'tariff bomb' likely had a positive impact on Samsung's DRAM shipments.

Researcher Kim Sun-woo of Meritz Securities cited the early shipment effect of smartphones as the reason behind Samsung Electronics' 'strong first quarter.' Kim said, "Based on solid smartphone shipments, the results exceeded market expectations," adding, "It is also necessary to consider the low base effect due to extremely low semiconductor profit expectations."

He also predicted that the second-quarter performance might be weak due to the full-scale implementation of the Trump administration's tariff policy. Although memory prices are expected to rise, the industry downturn continues, and mobile sales that were brought forward due to tariff concerns may decline again.

Researcher Kim forecasted, "With limited visibility for a clear improvement in the semiconductor division in the second quarter, the company's overall operating profit is likely to remain at a level similar to the first quarter," adding, "Unless there is an expansion in shipments of key HBM products, the company's overall performance may decline compared to the previous quarter depending on the MX division's profit decrease."