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Source: AFP
South Korean tech elephantine Samsung Electronics reported a better-than-expected 21.7 percent emergence successful first-quarter nett net connected Wednesday arsenic consumers rushed to bargain smartphones nether the looming menace of US tariffs.
The steadfast said it expected improved net successful the 2nd fractional if "uncertainties are diminished".
The results travel arsenic Seoul and Washington enactment to trade a "trade package" intended to rotation backmost US President Donald Trump's caller tariffs up of the July 8 expiration of a reciprocal tariff freeze.
Samsung Electronics is the flagship subsidiary of South Korean elephantine Samsung Group, by acold the largest of the family-controlled conglomerates that predominate business successful Asia's fourth-largest economy.
The world's largest representation chipmaker reported nett net of 8.22 trillion won ($5.75 billion) for the January–March quarter, up 21.7 percent on-year.
Sales roseate 10 percent to an all-time quarterly precocious of 79.14 trillion won and operating nett roseate 1.2 percent to 6.7 trillion won on-year, exceeding forecasts according to Yonhap News Agency, which cited its ain fiscal information firm.
South Korea -- 1 of the United States' cardinal trading partners and location to powerhouse spot and car industries -- earlier this period besides unveiled an further $5 cardinal concern successful its semiconductor industry, citing "growing uncertainty" stemming from US tariffs.
The figures were "on the backmost of beardown income of flagship Galaxy S25 smartphones and high-value-added products," the institution said successful a statement.
"Despite the increasing macroeconomic uncertainties owed to caller planetary commercialized tensions and slowing planetary economical growth," Samsung said it "expects its show to amended successful the 2nd fractional of the year," assuming "that the uncertainties are diminished".
Analysts besides attributed the results successful portion to grounds income of the caller Galaxy S25 bid smartphone, which launched successful February.
Source: AFP
The firm's "early instauration of AI features, opening with the Galaxy S24 and enhanced further successful the S25, gave it a beardown competitory edge," Sheng Win Chow, an expert astatine Canalys, told AFP.
"The operation of autochthonal on-device AI capabilities and Google Gemini apps offered users a affluent suite of AI functions close retired of the box, creating beardown propulsion factors for aboriginal adopters."
But experts expressed concerns arsenic much than fractional of Samsung's smartphones are manufactured successful Vietnam, wherever steep tariffs of up to 46 percent could beryllium imposed if commercialized negotiations betwixt Washington and Hanoi interruption down.
According to expert Chow, much than 90 percent of Samsung's US smartphone shipments originate from Vietnam, and to efficaciously mitigate risks, the institution "would request to ramp up accumulation and export of higher-end models similar the Galaxy S25 bid from India".
But "this displacement would necessitate clip and operational adjustments," helium added.
Trade tensions
Despite much than a twelvemonth of efforts to adjacent the spread with South Korean rival SK hynix, Samsung has struggled to proviso precocious volumes of high-bandwidth representation (HBM) chips to Nvidia, a starring subordinate successful the AI spot market.
The institution has leaned much connected Chinese clients arsenic a result, but the marketplace successful China present faces mounting unit arsenic Washington moves to further tighten spot export rules.
Washington has already restricted exports to China, the world's biggest purchaser of chips, of Nvidia's astir blase graphics processing units (GPUs), designed to powerfulness top-end AI models.
Meanwhile, Chinese startup DeepSeek has emerged arsenic a formidable challenger, making waves successful January with its R1 chatbot, matching the show of its US competitors astatine a little cost.
"For astir countries, excluding China, significantly lowered wide tariffs tin beryllium expected depending connected negotiation," MS Hwang, a probe manager astatine Counterpoint, told AFP.
"However, owed to strengthened export restrictions connected China, determination remains unit (on Samsung) connected the second-half income of products similar HBM."
Gloria Tsuen, a Moody's Ratings vice president and elder recognition officer, said Samsung's "leadership successful the semiconductor marketplace had eroded implicit the past fewer years," particularly successful the "AI and high-end products successful its representation segments".
"Concurrently, contention from Chinese companies successful low-end representation products is increasing," she told AFP.
"As a result, we expect Samsung's operating borderline to stay moderate."
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Source: AFP
