Samsung, sales and profits grow but the risk of tariffs looms in the future

Samsung opens 2025 with a tightrope walker performance: solid, but also hanging on a thin thread of tariffs, chips and global challenges. The first-quarter accounts of the South Korean giant tell a two-speed story, where smartphones shine and semiconductors struggle, against the backdrop of a trade war with uncertain and insidious contours.

Turning to the good news, this mainly comes from the Galaxy S25, Samsung's flagship smartphone. Launched in February, it won over consumers with its enhanced artificial intelligence features, contributing decisively to the 22% increase in quarterly net profit to 8.223 billion won ($5.74 billion). This performance exceeded analysts' expectations and also set a new quarterly sales record: 79,141 billion won (+10%).

The mobile division generated profits of 4.3 trillion won, the highest level in four years. This was a breath of fresh air that allowed the group to at least partially mask the difficulties of its historically most profitable area: chips.

In fact, the South Korean giant's real Achilles' heel remains its semiconductor business, which is being bent by two converging forces: the slowdown in global demand and US restrictions on the export of advanced chips to China, one of Samsung's main markets. The result? The division's operating profit plummeted 62% from the previous quarter, stopping at 1.1 trillion won. That's a far cry from the glories of yesteryear - and from the more than 7 trillion recorded in the same period by rival SK Hynix, which was strong in supplying HBM3E chips to Nvidia.

But shaking Samsung's horizons is above all the new wave of geopolitical uncertainty. The reciprocal duties threatened (and temporarily suspended) by the Trump administration hit the company's production chain, which manufactures most of its smartphones in Vietnam and most of the televisions sold in North America in Mexico. According to analyst Sheng Win Chow, over 90% of Samsung devices destined for the US come from Vietnam, a country now under tariff threat. The company has already announced possible manufacturing relocations to contain the impact of the duties - a complex move that will take time and investment.