(April 8): Samsung Electronics Co’s quarterly profit beat expectations after strong demand for its Galaxy S25 smartphones and legacy DRAM outpaced slipping margins in the high-stakes AI memory arena.

South Korea’s largest company reported preliminary operating profit of around 6.6 trillion won (US$4.5 billion or RM21.4 billion) in the March quarter, versus analysts’ average projection for 5.74 trillion won. Revenue climbed roughly 10% to 79 trillion won. The company will provide a full financial statement with net income and divisional breakdowns later this month.

The boost from the smartphones business is a relief for a company grappling with challenges throughout the pivotal high-bandwidth memory business. The world’s largest memory maker has struggled to get Nvidia Corp’s approval for its most advanced HBM, slipping further behind rival SK Hynix Inc. in the lucrative market of enabling AI accelerators.

That’s left the Korean company more reliant on customers in China who seek products not subject to US export curbs. But that pie is shrinking. Tighter US restrictions on semiconductors are limiting the Korean company’s ability to supply memory to its customers in China. That’s capping sales at a time Samsung is spending more to develop power-efficient AI chips for the high-end market.

Samsung had previously said it expects strong AI and mobile demand to boost sales of memory for an earnings recovery in the second half of the year.

Jun Young-hyun, head of the chip business, told shareholders last month that Samsung plans to supply enhanced 12-layer HBM3E as early as the second quarter of this year and aims to produce cutting-edge HBM4 chips in the second half. HBM4 memory is expected to be integrated into Nvidia’s upcoming Rubin GPU architecture. To get Nvidia’s signoff, Samsung has had to redesign its HBM3E chip, at the risk of falling further behind SK Hynix.

SK Hynix is aggressively positioning itself as the primary supplier of HBM4 that’s paired with Nvidia’s advanced graphics processors. The Korean company said it shipped the world’s first 12-layer HBM4 samples to major customers ahead of schedule.

Samsung’s AI chip troubles come as its smartphones are expected to take a direct hit from US President Donald Trump’s barrage of tariffs. Many of the company’s mobile phones are made in Vietnam, while a portion of its home appliances are produced in Mexico, which largely avoided Trump’s broad tariffs.

The Suwon-based company was dealt an additional blow from the sudden death of co-CEO Han Jong-hee last month from cardiac arrest. Samsung said last week TM Roh, the head of its mobile business, will temporarily expand his role to also oversee the consumer electronics divisions.

Samsung launched new Galaxy S25 smartphones in San Jose, California in January: the S25 starting at US$799, a larger S25+ and the top-tier S25 Ultra priced from US$1,299 and up. Spanning 6.9 inches in size, the new Ultra model gains the most significant design changes and camera hardware upgrades.

Uploaded by Jason Ng