Samsung AI strategy delivers record revenue despite semiconductor headwinds

Samsung Electronic Devices’ strategic focus on AI has actually provided high profits in the very first quarter of 2025, as the South Oriental technology titan browses semiconductor market obstacles and expanding worldwide profession unpredictabilities.

The business uploaded an all-time quarterly high profits of KRW 79.14 trillion ($ 55.4 billion), noting a 10% rise year-over-year, according to its economic outcomes launched on Wednesday. Operating earnings reached KRW 6.7 trillion ($ 4.68 billion), standing for a small 1.5% rise contrasted to the very same duration in 2014.

The outcomes went beyond Samsung’s earlier projection of KRW 79 trillion and experts’ assumptions.

Mobile phone success counters chip obstacles

The Mobile Experience (MX) Company became the most effective entertainer, adding KRW 37 trillion in combined profits and KRW 4.3 trillion in operating earnings– its highest degree in 4 years. The success was driven mainly by solid sales of the front runner Galaxy S25 collection, which includes AI capabilities using Galaxy AI.

” Boosted price proficiency and cost decreases for some parts additionally added to strong double-digit earnings,” the business’s profits record stated.

On the other hand, Samsung’s Gadget Solutions (DS) Department, that includes its semiconductor operations, uploaded KRW 25.1 trillion in profits and KRW 1.1 trillion in operating earnings– a 42% decrease from the previous year. The efficiency shows recurring obstacles in the semiconductor market, specifically in high-bandwidth memory (HBM) sales.

” Total profits were influenced by the disintegration of ordinary market price (ASP), in addition to a decline in HBM sales because of export controls on AI chips and delayed demand in expectancy of upcoming boosted HBM3E items,” Samsung stated.

Profession stress shadow future expectation

Regardless of the document profits, Samsung has actually shared care concerning the 2nd quarter, dropping its typical service expectation because of expanding macroeconomic unpredictabilities originating from worldwide profession stress and reducing financial development.

” Because of the fast adjustments in plans and geopolitical stress amongst significant nations, it’s challenging to precisely forecast business effect of tolls and developed countermeasures,” a Samsung exec specified throughout Wednesday’s profits telephone call.

Of certain problem are United States Head of state Donald Trump’s “mutual” tolls, a lot of which have actually been put on hold till July yet endanger to influence lots of nations consisting of Vietnam and South Korea, where Samsung generates mobile phones and display screens.

While Samsung kept in mind that its front runner items like semiconductors, mobile phones, and tablet computers are presently excluded from these tolls, the business exposed that Washington is performing a product-specific toll probe right into these groups.

” There are a great deal of unpredictabilities in advance of us […] we are interacting with associated nations to reduce adverse results,” Samsung stated throughout the telephone call.

In feedback to its obstacles, the business revealed it is thinking about transferring manufacturing of Televisions and home devices.

AI financial investment and future technique

Regardless of these headwinds, Samsung stays fully commited to its expert system technique, designating its highest-ever yearly R&D expense for 2024. In the very first quarter of 2025, the business enhanced R&D investing by 16% contrasted to the very same duration in 2014, totaling up to KRW 9 trillion.

For the rest of 2025, Samsung intends to increase its AI smart device schedule with the intro of “Amazing Knowledge” to the Galaxy A collection and the launch of the Galaxy S25 Side in Q2. Later on in the year, the business will certainly enhance its collapsible schedule with boosted AI individual experiences.

In the semiconductor area, Samsung intends to enhance its setting in the high-value-added market with its server-centric profile and the ramp-up of boosted HBM3E 12H items to fulfill preliminary need. The business anticipates AI-related need to continue to be high in the 2nd fifty percent of 2025, accompanying the launch of brand-new GPUs.

” In the mobile and computer markets, on-device AI is anticipated to multiply, so the Memory Company will proactively reply to this change in business atmosphere with its industry-leading 10.7 Gbps LPDDR5x items,” Samsung specified.

The business’s factory service stays concentrated on its 2nm Gate-All-Around (GAA) procedure advancement, which stays on time regardless of present obstacles.

Market response and affordable landscape

Samsung shares were trading down about 0.6% complying with the statement, mirroring capitalist worries concerning the unpredictable expectation.

The outcomes highlight Samsung’s intricate setting in the AI market– being successful in consumer-facing applications while functioning to overtake rivals in AI-specific semiconductor parts.

Regional competing SK Hynix, which reported a 158% enter operating earnings recently to KRW 7.4 trillion, has actually surpassed Samsung in general DRAM market profits for the very first time, catching 36% worldwide market share contrasted to Samsung’s 34%, according to Counterpoint Study.

SK Hynix’s success has actually been specifically articulated in the high-bandwidth memory section, which is important for AI web server applications.

” Samsung has actually presumed that the unpredictabilities are lessened, it anticipates its efficiency to enhance in the 2nd fifty percent of the year,” the business kept in mind, striking a meticulously hopeful tone regardless of the obstacles in advance.

Samsung’s document profits covers up a critical crossroads for the technology titan: while its AI-enhanced mobile phones prosper, its once-dominant semiconductor service threats falling back in the AI change.

The coming quarters will certainly disclose whether Samsung’s huge R&D financial investments can recover shed ground in HBM chips, or if we’re observing a basic power change in Eastern technology production that might change the worldwide AI supply chain for several years to find.

For a business that restored itself various times over its 56-year background, the AI semiconductor race might show to be its most substantial change yet.

( Photo credit history: Anthropic)

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