Despite Record Revenue in 1Q, Consumer Goods Dependence Confirmed Again
Revenue Hits 79.1 Trillion Won, Operating Profit Reaches 6.6 Trillion Won
Strong Galaxy S25 Sales Drive Overall Performance
Samsung Electronics' semiconductor division posted an operating profit of just over 1 trillion won in the first quarter of this year. Despite increased sales of server DRAM, a decline in sales of high-bandwidth memory (HBM) affected the results. The company's structure was revealed to be heavily dependent on the consumer goods sector, such as smartphones and home appliances, which accounted for more than 70% of total profit.
On April 30, Samsung Electronics announced that its consolidated operating profit for the first quarter of this year was 6.6853 trillion won, a 1.2% increase from the same period last year. Revenue reached 79.1405 trillion won, up 10.05% year-on-year, marking an all-time quarterly high.
By business segment, the Device Solutions (DS) division, responsible for semiconductors, underperformed. The DS division recorded sales of 25.1 trillion won and operating profit of 1.1 trillion won. Memory sales fell to 19.1 trillion won, a 17% decrease from the previous quarter. Although server DRAM sales increased, the decline in HBM sales, driven largely by semiconductor export controls, had a significant impact. System LSI saw a slight improvement in performance due to increased sales of high-pixel image sensors, while foundry (semiconductor contract manufacturing) continued to struggle due to weak seasonal demand, customer inventory adjustments, and stagnant utilization rates.
The Device eXperience (DX) division, which handles finished products such as smartphones and home appliances, recorded sales of 51.7 trillion won and operating profit of 4.7 trillion won, accounting for about 70% of total profit. Of this, the Mobile eXperience (MX) and Network business units posted sales of 37 trillion won and operating profit of 4.3 trillion won. Strong sales of the Galaxy S25 series and falling component prices were the main contributors.
However, it remains uncertain whether the DX division will be able to maintain this strong performance through the second quarter. This is due to expectations that global trade conditions will worsen and economic growth will slow, increasing uncertainty in results.
In the memory segment, Samsung Electronics aims to defend profitability by expanding its lineup of HBM3E 12-layer products and high-capacity DDR5 (fifth-generation double data rate) for servers, as well as transitioning to eighth-generation V-NAND. For System LSI, the company is working to expand supply to flagship customers and increase sales of 200-megapixel image sensors. The foundry business is aiming for a recovery in performance by stabilizing mass production using the 2nm (1nm = one-billionth of a meter) process and responding to demand from the automotive sector.
For smartphones, demand is expected to decline due to the seasonal off-peak period, but the company plans to continue its flagship-focused strategy, including the Galaxy S25 Edge. For TVs, Samsung Electronics will launch models with enhanced artificial intelligence (AI) features in global markets, while for home appliances, it aims to drive sales growth with new Bespoke AI products and by responding to peak season demand for air conditioners.
A Samsung Electronics official stated, "To fundamentally improve our profit structure, we will accelerate the recovery of our B2B businesses such as semiconductors and displays," adding, "We will focus on securing cost competitiveness and strengthening technological leadership to prepare for global supply chain risks."
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