Tech large Samsung Electronics elevated its earnings steering for the primary quarter of the yr on Tuesday. It comes following a surge in gross sales forward of anticipated US tariffs on chip imports.
The corporate expects consolidated gross sales to come back in at about 79 trillion Korean received (€48.8 billion), with consolidated working revenue estimated to be round 6.6 trillion Korean received (€4.1 billion).
The consolidated working revenue estimate for the primary quarter of 2025 is greater than than the 5.2 trillion Korean received (€3.2 billion) predicted by the London Inventory Alternate Group’s StarMine SmartEstimates mannequin.
Equally, the consolidated gross sales steering is a rise of just about 10% year-on-year from the corporate’s Q1 2024 consolidated gross sales determine.
Samsung’s shares closed 0.6% greater on the Korea Alternate on Tuesday following the replace.
This up to date steering comes as Samsung continues to expertise a lift in gross sales, pushed primarily by better-than-expected demand for its DRAM chips and its flagship synthetic intelligence smartphones.
This flurry of shopping for exercise has been exacerbated by the expectation of US tariffs on chip imports within the coming months.
Though most semiconductors are at the moment exempt from US tariffs, following his Liberation Day speech, US president Donald Trump threatened that levies on chip imports could be applied in a short time too. This has supported demand for each much less subtle and superior ‘legacy’ chips.
Samsung continues to face woes regardless of increase in gross sales
Though Samsung has benefited from rising chip gross sales, underlying hurdles stay. This consists of falling costs, rising losses in contract manufacturing, and late shipments of synthetic intelligence chips.
The corporate can also be redesigning one of the best of its Excessive Bandwidth Reminiscence (HBM) merchandise, as a way to fulfill Nvidia’s choice standards for Samsung’s AI chips. Rising losses at Samsung’s foundry enterprise, which produces chips for exterior shoppers, have additionally impacted the corporate. That is primarily due to the foundry enterprise struggling to extend yields and develop its consumer base.
Ongoing robust competitors from rival chipmaker SK Hynix has made it tougher for Samsung to ascertain itself extra strongly within the semiconductor market. That is primarily due to SK Hynix’s appreciable investments in HBM improvement and early entry into the market. SK Hynix additionally has a powerful, established relationship with main shoppers akin to Nvidia already.
Present and upcoming US tariffs may additionally drive Samsung to rethink its manufacturing and gross sales technique, which can contain transferring a few of its manufacturing services to extra beneficial places.
The corporate is going through delays within the start-up of its new US manufacturing unit in Taylor, Texas. Though the corporate anticipated to start out manufacturing at this plant within the second half of 2024, this has now been pushed again to 2026. That is primarily due to struggles in securing main shoppers for its foundry enterprise.
