By Heekyong Yang, Joyce Lee and Hyunjoo Jin
SEOUL (Reuters) -Samsung Electronics on Tuesday flagged a much smaller-than-feared 0.2% fall in first-quarter operating profit, boosted by solid memory chip sales and strong smartphone demand, partly driven by customers concerned about U.S. tariffs.
Sales of conventional memory chips used in consumer devices such as smartphones and AI chips likely came in better than expected, with some customers stockpiling chips ahead of potential U.S. tariffs on semiconductors, analysts said.
The world’s largest memory chipmaker estimated an operating profit of 6.6 trillion won for the January-March period, well above a 5.1 trillion won LSEG SmartEstimate.
That would compare with 6.61 trillion won in the same period a year earlier and 6.49 trillion won in the preceding quarter.
"While general memory prices dipped, strong demand from customers looking to secure inventory ahead of potential U.S. tariffs helped boost Samsung’s memory chip shipments, supporting overall performance," said Greg Roh, head of research at Hyundai Motor (OTC: HYMTF ) Securities.
Samsung, reshuffling its top ranks following the sudden death of co-CEO Han Jong-Hee last month, is expected to release detailed results including a breakdown of earnings for each of its businesses on April 30.
Last week, U.S. President Donald Trump announced a slew of reciprocal tariffs on trading partners, including China. While semiconductors were exempted from reciprocal tariffs, Trump on Thursday reiterated plans to levy tariffs on chips very soon.
Roh said Samsung’s AI features in the Galaxy S25 smartphone models helped drive strong sales, adding that preemptive smartphone shipments by North American customers ahead of the tariffs likely contributed to first-quarter results.
Analysts noted that Samsung’s smartphone shipments rose in the first quarter, driven in part by preemptive shipments in certain channels, which they estimate were made in anticipation of the U.S. tariffs, and as a result, shipments are likely to decline in the second quarter.
Samsung Electronics (KS: 005930 ) in January unveiled its newest Galaxy S25 smartphones, hoping their upgraded AI features could reinvigorate sales and fend off Apple (NASDAQ: AAPL ) and Chinese rivals.
South Korea’s SK Hynix the world’s second-largest memory chipmaker, said last month that some customers have brought forward orders in preparation for new U.S. tariffs, but was wary of counting on a sustained demand recovery.
Micron Technology (NASDAQ: MU ) in March forecast third-quarter revenue above Wall Street estimates, signalling strong demand for its high-bandwidth memory (HBM) chips used in AI models.
