Samsung profits surge as buyers stockpile chips ahead of Trump tariffs

Samsung Electronics March quarter earnings beat estimates as demand spikes for semiconductors and smartphones amid fears of steep US import duties under Trump's trade policy

Samsung Electronics has posted stronger-than-expected quarterly profits as customers rushed to secure chips and smartphones ahead of impending US tariffs and export restrictions, according to a report by The Financial Times on Tuesday.

 

The South Korean tech giant projected an operating profit of 6.6 trillion South Korean won or KRW ($4.5 billion) for the first quarter of 2025, surpassing analysts’ expectations of 5.2 trillion KRW, the report said. Sales are estimated to have increased by 10 per cent year-on-year. The company’s stock rose 2.1 per cent in early trading, though it lagged behind local competitor SK Hynix, which saw its shares climb nearly 4 per cent.

 

 

Trump tariffs drive demand for chips and smartphones

Concerns over new US trade policies under President Donald Trump have spurred demand for semiconductors, particularly memory chips and AI-related components. While most semiconductors were initially exempt from tariffs announced last week, Trump later indicated that duties on chip imports and pharmaceuticals—previously excluded from reciprocal tariffs—would be imposed “very soon”. This uncertainty has led customers to stockpile both cutting-edge and legacy chips, benefiting Samsung’s semiconductor business.

 

US export controls on Chinese chipmakers have also contributed to rising demand. China’s technology companies, particularly AI firms, have accelerated purchases of Samsung’s high-bandwidth memory (HBM) chips, which are used in AI processors such as Nvidia’s H20—a model specifically configured to comply with US trade restrictions. Samsung’s contract chip manufacturing division has also seen increased orders from Chinese clients, including search engine giant Baidu.

 

Challenges in Samsung’s chip division

Despite the surge in first-quarter earnings, analysts highlight ongoing struggles in Samsung’s semiconductor division. Falling chip prices, delays in AI chip shipments, and losses in the contract manufacturing segment continue to weigh on the company’s financial performance. Samsung is currently working to redesign its latest HBM chips to meet Nvidia’s qualification standards for use in high-performance AI applications.

 

Samsung’s foundry business, which produces chips for external clients, has also been under pressure. Reports suggest that weak customer expansion and low production yields have contributed to mounting losses in this segment. However, some experts believe Samsung is positioned to benefit from an improving semiconductor cycle later this year.

 

Smartphone sales surge amid tariff fears

Samsung’s smartphone division also recorded a strong performance in the first quarter, driven by the success of its Galaxy S25 series. Many North American customers reportedly brought forward their purchases to avoid potential price increases resulting from new US import tariffs.

 

Impact of Trump tariff on Samsung

Last week, the Trump administration announced a baseline 10 per cent tariff on all nations, with higher tariffs for countries against which the US records a trade deficit. In the case of South Korea, a 25 per cent tariff was imposed on imports, which could lead to price hikes across Samsung’s consumer electronics range, including smartphones, televisions, and home appliances.

 

In addition, a staggering 46 per cent tariff was announced on imports from Vietnam, where nearly half of Samsung’s smartphones are manufactured. Meanwhile, Samsung’s television production in Mexico is expected to be affected by a 20 per cent US tariff.

 

US consumers panic buy imported goods

The effects of US trade policies extend beyond the technology sector. US media reports indicate that new and used vehicle prices in the US are set to rise sharply due to Trump’s 25 per cent tariff on imported automobiles, which took effect last week. US auto sales for March came in higher than expected, which reports suggest could be a sign of “panic buying” as consumers rushed to purchase vehicles before the new tariffs on foreign-made cars took effect.

 

An additional 25 per cent tariff on auto parts is set to take effect by May 3.