From Yahoo Finance: 2025-04-06 18:05:00

Samsung Electronics is expected to forecast a 21% drop in first-quarter profit due to sluggish sales of AI chips and losses in contract chip manufacturing. Falling behind SK Hynix in chip supply to Nvidia has left Samsung reliant on less advanced products for Chinese customers.

Analysts project Samsung to report a 5.2 trillion won operating profit in the January-March quarter, down from 6.6 trillion won a year ago. The company’s profitability is vulnerable to volatile chip prices, with DRAM prices falling by about 25% and NAND flash prices dropping around 50% in the first quarter.

As a result of falling chip profits, Samsung is expected to underperform SK Hynix, whose profit is set to more than double from a year earlier. Reciprocal tariffs imposed by the U.S. are also expected to raise costs for Samsung’s products, impacting consumer demand.

Samsung’s mobile and network business is anticipated to report 3.7 trillion won in profit, up from 3.5 trillion won a year ago, helped by increased smartphone shipments and a drop in the local currency. The company is likely to delay the start-up of its new U.S. factory to 2027 due to a lack of major production orders.

Read more: Samsung Q1 profit to drop 21% on weak AI chip sales, foundry losses