Samsung Electronics has exceeded market expectations for its first-quarter earnings, reporting strong sales of its flagship artificial intelligence (AI) smartphones and better-than-expected demand for DRAM chips. On Tuesday, the South Korean tech giant provided its earnings guidance for the January-March period, projecting a consolidated operating profit of 6.6 trillion won ($4.48 billion). Although this figure marks a slight 0.15 percent year-on-year decrease, it is notably higher than the market consensus of 5.15 trillion won, according to financial data provider FnGuide.
Samsung also forecast consolidated sales of 79 trillion won, an increase of 9.84 percent compared to the same period last year. This marks the highest-ever first-quarter revenue for the company and exceeds analysts’ expectations, which had estimated sales of 77.1 trillion won.
Rising Market Expectations
Several challenges had caused concern for Samsung’s first-quarter results. Delays in supplying its 12-layer HBM3E AI chips to major client Nvidia and intensified competition in core segments, such as TVs and home appliances, had led to speculation that the company’s Q1 operating profit might fall below 5 trillion won. However, the outlook has significantly improved in recent weeks.
“The market outlook was bleak just a few weeks ago, but expectations for a rebound have grown,” said Ryu Young-ho, a senior analyst at NH Investment & Securities. “Ongoing inventory adjustments and improved supply conditions in the industry have played a key role in this positive shift.”
Strong Smartphone Sales and Memory Demand
While Samsung has not yet broken down the performance by business division, analysts believe the smartphone segment played a crucial role in driving the company’s strong results. The Galaxy S25 series, which launched in February, achieved remarkable success, selling 1 million units in just 21 days. This milestone made it the fastest-selling Galaxy lineup in South Korea.
In addition to smartphones, Samsung’s memory chip division also exceeded expectations. Particularly in China, government-backed trade-in programs for home appliances have boosted consumer spending, which, in turn, has increased demand for Samsung’s memory chips.
Samsung’s semiconductor division is expected to post a preliminary operating profit of approximately 1 trillion won for the first quarter. This includes an estimated 3 trillion won from the memory chip business, with losses of around 2 trillion won from logic chips and foundry operations.
Outlook for the Rest of 2025
Looking ahead to the April-June period, analyst outlooks remain mixed due to continued market turbulence and geopolitical uncertainty. A significant risk to Samsung’s outlook is the rising global tariff pressures, especially from the US.
Samsung, which is currently trailing SK hynix in the high-bandwidth memory (HBM) chip market, has vowed to strengthen its position in high-value DRAM products. However, the semiconductor market remains volatile, and there is ongoing discussion in the US about extending tariffs to include semiconductors.
Hana Securities, in its report, expects Samsung’s memory division to drive a recovery in earnings. However, the firm has revised down its profitability forecasts for Samsung’s smartphone business from the second quarter onward, primarily due to potential impacts from tariffs.
“Starting in Q2, we expect improved supply-demand conditions and rising prices as the memory market enters an upward cycle,” said Kim Dong-won, senior analyst at KB Securities. He expects quarterly earnings to recover steadily from the first-quarter low through to Q4.
Cautious View on HBM Shipments
However, not all analysts are as optimistic. Song Myung-sub, an analyst at iM Investment & Securities, presented a more cautious outlook. “HBM shipments in Q2 are unlikely to see meaningful growth due to the absence of major clients,” he noted. While contract prices for DDR5, Samsung’s latest DRAM chip in mass production, remain stable, prices for older chips such as DDR4 and NAND flash are expected to remain flat. This is due to high inventory levels and weak demand, which will likely dampen price increases.
Q1 Earnings Call Scheduled for April 30
Samsung is scheduled to report its full Q1 earnings on April 30 and hold an earnings call. The company’s performance in the coming quarters will be closely watched, as it faces both challenges and opportunities in a highly competitive and rapidly changing market.
