Samsung Electronics has reported a robust 21.7% increase in its first-quarter net profit, reaching 8.22 trillion won ($5.75 billion), defying market expectations amid rising global trade tensions. The South Korean tech giant credited strong sales of its flagship Galaxy S25 smartphones and high-value-added products for the impressive results, with total sales climbing 10% to a record 79.14 trillion won.
Operating profit also edged up 1.2% to 6.7 trillion won, bolstered by early adoption of on-device artificial intelligence (AI) capabilities. Analysts pointed to Samsung’s successful integration of AI features starting with the Galaxy S24 and refined in the Galaxy S25 series. The use of native AI alongside Google’s Gemini apps gave Samsung a competitive edge, according to Sheng Win Chow, an analyst at Canalys.
However, Samsung’s future outlook is tempered by geopolitical and economic uncertainties, especially surrounding the U.S. trade policy. More than half of Samsung’s smartphones are produced in Vietnam, making them vulnerable to potential U.S. tariffs of up to 46% if trade talks between Washington and Hanoi falter. With over 90% of Samsung’s U.S.-bound smartphones shipped from Vietnam, analysts suggest ramping up production in India to hedge against tariff risks—a move that would require considerable logistical adjustments.
Samsung’s semiconductor business also faces challenges. While it remains the world’s largest memory chipmaker, the company continues to lag behind rival SK hynix in the high-bandwidth memory (HBM) segment. Its inability to secure large-volume supply deals with AI chip leader Nvidia has forced a pivot toward Chinese clients. Yet, the tightening of U.S. chip export regulations to China has compounded the pressure.
Adding to competitive concerns, Chinese tech firms like DeepSeek are gaining traction in AI, while low-end memory competition from China intensifies. Moody’s Ratings vice president Gloria Tsuen noted that Samsung’s leadership in the semiconductor space has diminished, especially in high-end AI memory products.
Despite these headwinds, Samsung remains cautiously optimistic. The company stated that it expects performance to improve in the second half of 2025, provided global uncertainties ease and trade conditions stabilize.
