Shares of Samsung Electronics surged following a strong quarterly profit, which exceeded expectations thanks to strong sales of the Galaxy S25 smartphone and its legacy DRAM products, alleviating worries about the company’s ability to navigate U.S. tariffs and chip export restrictions. South Korea’s largest company benefited from stockpiling by Chinese retailers and manufacturers, who rushed to secure electronics supplies during the March quarter before U.S. President Donald Trump imposed tariffs on trading partners. The demand for servers utilizing Samsung’s high-density DRAM also contributed to the profit, though the outlook for smartphones and AI components has grown more uncertain in recent days.
Samsung’s stock price increased by 4% on Tuesday morning in Seoul, while rival SK Hynix’s shares rose by 5%.Preliminary operating profit came in at approximately 6.6 trillion won ($4.5 billion), matching last year’s figure and surpassing analysts’ consensus of 5.74 trillion won. Revenue rose about 10% to 79 trillion won. A more detailed financial report, including net income and divisional breakdowns, is expected later this month.
The focus is now shifting to Samsung’s ability to secure higher prices for its chips in the coming months. Sanjeev Rana, from CLSA Securities Korea, noted, “This sets the stage for price negotiations with major customers in Q2 and the rest of the year.”
The improvement in the smartphone division is a welcome boost for Samsung, which has faced difficulties in the crucial high-bandwidth memory (HBM) sector. As the world’s largest memory chip maker, Samsung has struggled to gain Nvidia’s final approval for its most advanced HBM products, falling further behind SK Hynix in the highly profitable AI accelerator market.
Samsung has been aggressively working to close the gap with SK Hynix for the past 18 months, but it has been unable to provide meaningful volumes of HBM chips to Nvidia. The company is also facing mounting losses in its contract chipmaking business.
This has left Samsung increasingly reliant on Chinese customers looking for products not affected by U.S. export restrictions, but that market could shrink as the U.S. tightens its controls on semiconductor shipments to China.
Previously, Samsung had forecasted strong AI and mobile demand would drive a recovery in memory sales in the second half of the year. Jun Young-hyun, head of Samsung’s chip business, told shareholders that the company plans to supply advanced 12-layer HBM3E chips as early as the second quarter of this year and aims to get Nvidia’s approval for its next-generation HBM4 chips in the second half.
HBM4 memory is expected to be integrated into Nvidia’s upcoming Rubin graphics processing unit architecture. To win Nvidia’s approval, however, Samsung had to redesign its HBM3E chip, risking falling even further behind SK Hynix at the cutting edge of technology.SK Hynix is positioning itself as the primary supplier of HBM4 for Nvidia’s advanced graphics processors, with the company boasting that it shipped the world’s first 12-layer HBM4 samples ahead of schedule.
While the strong performance in Samsung’s smartphone division is positive, it may face challenges from Trump’s tariffs. Many of the company’s mobile phones are made in Vietnam, while some of its home appliances, such as TVs, are manufactured in Mexico, which largely avoided the tariffs.Samsung is expected to diversify production to countries like Brazil to mitigate the impact, but, as Rana noted, “these things take time.” He also pointed out that Apple faces similar challenges, producing the majority of its smartphones in China, which could give Samsung the opportunity to gain market share from its U.S. competitor.
The company also faced an additional setback with the unexpected death of co-CEO Han Jong-hee last month from cardiac arrest. In response, Samsung announced last week that TM Roh, the head of its mobile business, would temporarily take on additional responsibilities to oversee the consumer electronics divisions.In January, Samsung launched its new Galaxy S25 smartphones in San Jose, California: the S25, priced starting at $799; a larger S25+ model; and the flagship S25 Ultra, which starts at $1,299. The S25 Ultra, at 6.9 inches, features significant design and camera hardware upgrades.
