samsung defies chip slump with ai smartphone surge

2025-04-08 general

Seoul, Tuesday, 8 April 2025.
samsung electronics reported record-high sales of 79 trillion won for january-march, a 9.8% increase year-on-year. this surge was fueled by ai-powered smartphones. the success of these devices managed to counterbalance a slowdown in samsung’s semiconductor business. while the ai smartphones boosted revenue, the company’s operating profit remained nearly unchanged at 6.6 trillion won. this highlights the growing importance of ai in consumer electronics, even amidst challenges in other sectors.

stock performance and analyst outlook

Despite the positive sales figures, Samsung’s stock experienced volatility [2][3]. On April 4, the stock closed down 2.60% at 54,600 won [2]. However, on April 8, it rebounded, trading at 54,600 won, up 2.63% or 1,400 won [3]. This fluctuation reflects market uncertainty, possibly influenced by factors like the U.S. tariff policies [2]. Securities firms are raising their target stock prices for Samsung, with Hana Securities setting the highest target at 84,000 won [2]. This indicates an expectation of improved performance, driven by recovering memory chip prices.

mixed prospects in the semiconductor division

Samsung’s semiconductor division faced challenges, impacting overall profitability [1][5][7]. While demand for data center servers remained strong, sales of high bandwidth memory (HBM), crucial for ai data processing, were lackluster [1]. This underperformance, coupled with declining prices in dram and nand flash memory, affected earnings [1]. Multiple securities firms reported losses in the foundry business, citing delays in mass production of advanced semiconductors compared to tsmc and increased development costs [1]. These factors are expected to contribute to a nearly 25% year-over-year decrease in operating profit for the first quarter [5].

market dynamics and competitive landscape

The broader market context reveals a mixed outlook for semiconductor companies [4]. While Samsung anticipates a decline in operating profit, sk hynix is projected to experience significant growth, with operating profit increasing by 126.39 from last year [4]. This divergence is attributed to sk hynix’s strong performance in the hbm sector [4]. Analysts suggest that the memory market’s recovery will benefit samsung from the second quarter onward, driven by improved supply-demand balance and rising prices [2]. However, potential demand-side risks from us-china trade tensions remain a concern [2].

factors affecting samsung’s q1 earnings

Analysts attribute the anticipated decrease in samsung’s q1 operating profit to several factors [5][6][7]. Delays in hbm delivery, losses in the foundry business, increased competition in the tv and home appliance sectors, and decreased profitability in the display division all contributed to the expected downturn [5]. Projections suggest a 20% or greater year-over-year decline in operating profit, settling around 5 trillion won [6][7]. Despite these challenges, some analysts believe samsung’s poor q1 performance has already been factored into the stock price, suggesting a potential for recovery [2].

Bronnen

Samsung AI Smartphones