With AI-powered Galaxy S25 fuelling record sales, Samsung profits jump 22 per cent in 1Q25. However, tariff fears spark a rush, as chip struggles and global trade tensions loom.
Samsung Electronics reported a 21.7 per cent year-on-year (YoY) increase in net profit for the first quarter, reaching 8.22 trillion won (£6.1 billion), boosted by strong demand for its smartphones amid uncertainty over potential US tariffs.
The South Korean tech leader also recorded record-breaking sales of 79.14 trillion won, up 10 per cent, while operating profit rose 1.2 per cent to 6.7 trillion won.
The surge was driven by high sales of its flagship Galaxy S25 smartphones and premium products. The inclusion of advanced AI capabilities, building on features first introduced in the Galaxy S24, helped distinguish the new model and attract early buyers.
According to The Economic Times, Samsung’s outlook for the second half of the year is cautiously optimistic, with expectations of improved earnings if global trade tensions ease. The timing coincides with negotiations between Seoul and Washington over a trade deal to prevent new US tariffs when the current agreement expires in July.
Over 90 per cent of Samsung’s smartphones sold in the US are produced in Vietnam, placing the company at risk should trade talks between the US and Vietnam fail. Analysts warn tariffs of up to 46 per cent could be applied, prompting Samsung to consider shifting production of premium models like the S25 to India—a move that would require time and operational changes.
The firm also faces difficulties in supplying high-bandwidth memory chips to AI leader Nvidia, falling behind rival SK hynix. Meanwhile, US restrictions on chip exports to China are tightening, affecting Samsung’s ability to serve that key market.
Despite retaining a strong position in the semiconductor industry, experts note rising competition, particularly from Chinese manufacturers, and predict that Samsung’s profit margins will remain under pressure.
