Samsung Electronics posts 22% bounce in Q1 internet revenue

South Korean tech big Samsung Electronics reported a better-than-expected 21.7 % rise in first-quarter internet revenue on Wednesday as customers rushed to purchase smartphones below the looming menace of US tariffs.

The agency mentioned it anticipated improved earnings within the second half if “uncertainties are diminished”.

The outcomes come as Seoul and Washington work to craft a “trade package” supposed to roll again US President Donald Trump’s new tariffs forward of the July 8 expiration of a reciprocal tariff freeze.

Samsung Electronics is the flagship subsidiary of South Korean big Samsung Group, by far the biggest of the family-controlled conglomerates that dominate enterprise in Asia’s fourth-largest economic system.

The world’s largest reminiscence chipmaker reported internet revenue of 8.22 trillion gained ($5.75 billion) for the January–March quarter, up 21.7 % on-year.

Sales rose 10 % to an all-time quarterly excessive of 79.14 trillion gained and working revenue rose 1.2 % to six.7 trillion gained on-year, exceeding forecasts in line with Yonhap News Agency, which cited its personal monetary information agency.

South Korea — one of many United States’ key buying and selling companions and residential to powerhouse chip and auto industries — earlier this month additionally unveiled an extra $5 billion funding in its semiconductor trade, citing “growing uncertainty” stemming from US tariffs.

The figures have been “on the back of strong sales of flagship Galaxy S25 smartphones and high-value-added products,” the corporate mentioned in a press release.

“Despite the growing macroeconomic uncertainties due to recent global trade tensions and slowing global economic growth,” Samsung mentioned it “expects its performance to improve in the second half of the year,” assuming “that the uncertainties are diminished”.

Analysts additionally attributed the ends in half to file gross sales of the brand new Galaxy S25 collection smartphone, which launched in February.

The agency’s “early introduction of AI features, beginning with the Galaxy S24 and enhanced further in the S25, gave it a strong competitive edge,” Sheng Win Chow, an analyst at Canalys, instructed AFP.

“The combination of native on-device AI capabilities and Google Gemini apps offered users a rich suite of AI functions right out of the box, creating strong pull factors for early adopters.”

But consultants expressed issues as greater than half of Samsung’s smartphones are manufactured in Vietnam, the place steep tariffs of as much as 46 % may very well be imposed if commerce negotiations between Washington and Hanoi break down.

According to analyst Chow, greater than 90 % of Samsung’s US smartphone shipments originate from Vietnam, and to successfully mitigate dangers, the corporate “would need to ramp up production and export of higher-end models like the Galaxy S25 series from India”.

But “this shift would require time and operational adjustments,” he added.

– Trade tensions –

Despite greater than a yr of efforts to shut the hole with South Korean rival SK hynix, Samsung has struggled to provide excessive volumes of high-bandwidth reminiscence (HBM) chips to Nvidia, a number one participant within the AI chip market.

The firm has leaned extra on Chinese purchasers because of this, however the market in China now faces mounting stress as Washington strikes to additional tighten chip export guidelines.

Washington has already restricted exports to China, the world’s largest purchaser of chips, of Nvidia’s most refined graphics processing models (GPUs), designed to energy top-end AI fashions.

Meanwhile, Chinese startup DeepSeek has emerged as a formidable challenger, making waves in January with its R1 chatbot, matching the efficiency of its US opponents at a decrease value.

“For most countries, excluding China, significantly lowered general tariffs can be expected depending on negotiation,” MS Hwang, a analysis director at Counterpoint, instructed AFP.

“However, due to strengthened export restrictions on China, there remains pressure (on Samsung) on the second-half sales of products like HBM.”

Gloria Tsuen, a Moody’s Ratings vp and senior credit score officer, mentioned Samsung’s “leadership in the semiconductor market had eroded over the last few years,” particularly within the “AI and high-end products in its memory segments”.

“Concurrently, competition from Chinese companies in low-end memory products is increasing,” she instructed AFP.

“As a result, we expect Samsung’s operating margin to remain moderate.”

cdl/mtp