Samsung Electronics reported its financial results for the first quarter of 2025, revealing revenue of KRW79.1 trillion (US$55.4 billion) and an operating profit of KRW6.7 trillion. Despite ongoing struggles in its semiconductor business, strong smartphone sales significantly contributed to the company's quarterly performance.
End product business compensates for downturn in components segment
According to Samsung and Money Today, Samsung's first-quarter revenue rose 4% year-over-year to KRW79.1 trillion, indicating robust performance. The Device eXperience (DX) division boosted its revenue by 28% from the previous quarter, driven by strong flagship smartphone sales and increased high-value home appliance sales. However, the Device Solutions (DS) division saw a 17% decline in revenue, primarily due to decreased sales of high-bandwidth memory and other products.
Samsung's overall operating profit for the first quarter increased by over KRW200 billion compared to the previous quarter, despite a downturn in the DS division. This rise was driven by strong sales of the Galaxy S25 series and high-value-added products in the Visual Display (VD) and home appliance sectors. Research and development expenses hit a record high of KRW9 trillion for the same period.
The DS division reported revenue of KRW25.1 trillion, making up about 31% of the total revenue, with an operating profit of KRW1.1 trillion, around 16% of the overall operating profit. Increased server DRAM sales and a rebound in NAND Flash prices boosted the memory business. Nevertheless, semiconductor export controls negatively impacted sales of high-bandwidth memory (HBM).
The System LSI business, despite not providing flagship SoCs to major clients, saw slight improvements thanks to an increased supply of high-pixel image sensors. In contrast, the wafer foundry business struggled due to seasonal dips in mobile device demand, inventory adjustments, and low capacity utilization rates.
In the first quarter, Samsung's DX division, managing smartphones and other end products, generated revenue of KRW51.7 trillion, accounting for 65% of the company's total revenue. The operating profit stood at KRW4.7 trillion, representing 70% of the total operating profit, establishing itself as the stabilizing force in Samsung's overall performance.
The Mobile eXperience (MX) business within the DX division experienced strong growth in revenue and operating profit, driven by Galaxy S25 series sales. Component price declines and enhanced resource efficiency also supported maintaining healthy double-digit profitability for the MX business.
In the fourth quarter of 2024, the VD business boosted profitability by increasing sales of strategic products such as Neo QLED and OLED, while also cutting material costs. The home appliance segment saw improved profits from a higher share of high-value-added products.
Harman, Samsung's automotive audio subsidiary, reported first-quarter revenue of KRW3.4 trillion and an operating profit of KRW300 billion. Despite a slow season leading to some performance deceleration, the company maintained growth momentum comparable to the same period in 2024 through an optimized product mix.
In the first quarter of 2025, Samsung Display reported a revenue of KRW5.9 trillion and an operating profit of KRW500 billion, resulting in an 8% operating margin. The performance of small- and medium-sized panels declined from the previous quarter due to seasonal factors, whereas large-sized panels saw an improvement as major clients introduced new QD-OLED monitors.
Uncertainty clouds recovery outlook
Samsung's second-quarter outlook reflects cautious optimism, citing improved market conditions and a gradual recovery in consumer demand. The company anticipates a modest boost in its technology sector, driven by increased investments in semiconductor and display technologies. However, Samsung remains vigilant about potential challenges such as global economic uncertainties and supply chain disruptions. The company aims to navigate these hurdles by leveraging its robust product portfolios and innovative solutions.
Samsung anticipates challenges in forecasting due to global trade issues and slowing economic growth. Despite these uncertainties, the company aims for continued growth and expects improved performance if conditions stabilize in the second half of 2025.
Departments have detailed several business strategies. The DS division, for instance, will concentrate its memory business on early demand for enhanced 12-layer HBM3E products. It aims to prioritize large-capacity server products to drive growth, boost competitiveness in high-value markets, and speed up the shift to eighth-generation 3D NAND production to improve cost efficiency.
The System LSI business intends to boost global sales of 200-megapixel sensors. Simultaneously, the wafer foundry business focuses on stabilizing mass production of 2nm processes to cater to mobile and automotive sector demands and enhance performance.
In the DX division, the MX business anticipates a seasonal dip in smartphone demand in the second quarter but aims to increase sales by focusing on the Galaxy S25 Edge. Meanwhile, the VD business plans a global launch of AI-enhanced TVs targeting the premium market. The home appliances division will promote BESPOKE AI innovations, leveraging the peak air conditioning season to drive sales.
Harman plans to boost portable audio and headphone sales to drive yearly revenue growth. For SDC, the outlook for small- and medium-sized panels is conservative due to rising uncertainties, but foldable product promotions will persist. Large-size panels will focus on ultra-high refresh rate monitors to meet gaming demand.
Article edited by Jerry Chen
