Shares of Samsung rose by 2.1% on Tuesday morning, as the company forecast an operating profit of Won 6.6 trillion ($4.5 billion) for the January-March quarter, surpassing analysts’ expectations of Won 5.2 trillion, according to LSEG SmartEstimate. Sales were projected to rise by around 10% year-on-year, a strong showing amid a complex global trade environment.
While the share price increase was notable, it lagged behind that of Samsung’s local rival SK Hynix, whose stock climbed nearly 4% as the South Korean market saw a slight recovery following Monday’s losses across Asia. The boost in Samsung’s profits came as tech customers rushed to buy both advanced and legacy memory chips in anticipation of new U.S. tariffs, particularly on semiconductor imports.
Although most semiconductors were exempted from U.S. tariffs last week, President Donald Trump announced shortly after that tariffs on chip imports would begin “very soon,” heightening the urgency among customers. The looming tariffs and export controls have driven up demand for key tech products, including those requiring memory chips used in artificial intelligence (AI) systems.
In particular, Chinese tech companies have scrambled to stockpile memory chips and AI-specific components, including Samsung’s high-bandwidth memory (HBM) used in Nvidia’s H20 AI chip. As reported by the Financial Times, Samsung’s contract chipmaking division has been supplying AI chips to Chinese clients like Baidu, with the company selling multiple years’ worth of logic dies to Baidu’s semiconductor design subsidiary last year.
Despite the better-than-expected results for the first quarter, analysts have warned that Samsung’s semiconductor division faces ongoing challenges. Falling chip prices, delayed shipments of AI chips, and widening losses in the contract manufacturing sector are ongoing concerns. Samsung has been working to redesign its advanced HBM products to meet Nvidia’s qualifications for its flagship AI chips, but its foundry business has been struggling, with losses mounting due to limited customer diversification and poor yields.
However, Jeff Kim, head of research at KB Securities, remains optimistic about Samsung’s prospects in the coming quarters. “Their earnings will improve this year after hitting the bottom in the first quarter, with chip demand outpacing supply,” Kim said.
Goldman Sachs analysts also expect conventional chip prices to stabilize in the third quarter, following a smaller-than-expected decline in the second quarter.
Meanwhile, Samsung’s smartphone division saw strong sales during the first quarter, especially with the release of its flagship Galaxy S25. A significant portion of these sales were driven by presales to North American customers eager to avoid price hikes resulting from U.S. tariffs. Last week, President Trump imposed a 25% tariff on imports from South Korea, which is expected to increase the cost of Samsung’s consumer electronics, including smartphones, TVs, and home appliances.
In addition, Trump announced a 46% tariff on imports from Vietnam, where Samsung manufactures nearly half of its smartphones. The company also produces most of its North American-bound televisions in Mexico, which faces a 20% tariff on imports to the U.S.
Analysts have warned that while the first quarter saw strong sales, the rush to stockpile chips and smartphones may lead to stagnation in sales during the second quarter. The ongoing trade tensions and tariff-related price increases are likely to have long-term effects on Samsung’s market dynamics, with uncertainty surrounding future demand.
