Samsung Electronics Reports Record Quarterly Revenue with Strategic Focus on AI and Innovation
Samsung Electronics has announced its financial results for the first quarter ending on March 31, 2025. The company achieved a remarkable feat by posting an all-time high quarterly consolidated revenue of KRW 79.14 trillion. This achievement was largely fueled by robust sales of its flagship Galaxy S25 smartphones and other high-value-added products. Despite facing challenges in certain divisions, Samsung’s operating profit reached KRW 6.7 trillion, indicating a resilient performance amidst global economic uncertainties.
Commitment to Research and Development
Samsung Electronics has demonstrated its commitment to innovation by allocating its highest-ever annual budget for research and development (R&D) in 2024. In the first quarter of 2025, the company increased its R&D spending by 16% compared to the same period last year, bringing the total to KRW 9 trillion. This strategic investment underlines Samsung’s dedication to advancing its technological capabilities and maintaining a competitive edge in the market.
Despite the ongoing macroeconomic uncertainties stemming from global trade tensions and a slowdown in global economic growth, Samsung remains optimistic about its future performance. The company is taking proactive measures to secure growth and anticipates an improvement in performance in the latter half of the year, assuming the prevailing uncertainties are alleviated.
Semiconductor Division Embraces AI-Driven Growth
The semiconductor segment, specifically the Device Solutions (DS) Division, reported consolidated revenue of KRW 25.1 trillion and an operating profit of KRW 1.1 trillion for the first quarter. Within this division, the Memory Business saw revenue growth driven by increased server DRAM sales and a rise in NAND demand, even as the market price appeared to stabilize.
However, the division’s overall earnings were affected by a decline in average selling prices (ASP) and reduced sales of high-bandwidth memory (HBM) due to export controls on AI chips and deferred demand in anticipation of the upcoming HBM3E products. Looking ahead to the second quarter of 2025, the Memory Business expects strong demand for AI servers. To capitalize on this trend, Samsung plans to enhance its position in the high-value-added market with a server-centric portfolio and ramp up production of the new HBM3E 12H products.
In the latter half of 2025, AI-related demand is projected to remain robust with the introduction of new graphics processing units (GPUs). Consequently, the Memory Business will focus on expanding sales of high-value-added products, including enhanced HBM3E 12H modules and high-density DDR5 modules of 128GB or higher. As AI technology becomes more prevalent in mobile and PC markets, Samsung aims to adapt by offering industry-leading 10.7Gbps LPDDR5x products.
The System LSI Business experienced modest earnings improvement, driven by increased supply of high-resolution sensors and LSI products. Despite a sluggish smartphone market, Samsung plans to maintain steady revenue in the second quarter by securing system-on-a-chip (SoC) adoption for new flagship models and capitalizing on the growing trend of 200-megapixel sensors.
For the Foundry Business, the first quarter was marked by muted earnings due to seasonal mobile demand fluctuations, inventory adjustments, and stagnant fab utilization. However, Samsung focused on advancing its 2nm Gate-All-Around (GAA) process, improving yields, and securing additional orders for sub-5nm nodes intended for AI and high-performance computing (HPC) applications. In the second quarter, the Foundry Business aims to stabilize its 2nm process production and capitalize on strong mobile and automotive demand in the United States. Looking further ahead, Samsung plans to commence 2nm mass production and secure major orders, while bolstering its specialty process portfolio on mature nodes.
Samsung Display Corporation: Navigating Challenges with Innovation
Samsung Display Corporation (SDC) reported consolidated revenue of KRW 5.9 trillion and an operating profit of KRW 0.5 trillion for the first quarter. The mobile display business faced declining profits quarter-on-quarter due to seasonality, while the large display business saw improvement through the launch of new QD-OLED monitor products for major clients.
In the second quarter of 2025, the mobile display business anticipates a conservative outlook on earnings but remains committed to supplying new products like foldables. Meanwhile, the large display business expects an increase in demand for gaming monitors with the launch of new products. In the latter half of 2025, SDC aims to boost mobile display business sales through differentiated technologies and products amid rising market uncertainties. For the large display business, SDC plans to strengthen its presence in both B2C and B2B monitor markets with a diverse product lineup.
MX Business: Expanding AI Capabilities for Growth
The MX and Networks businesses achieved consolidated revenue of KRW 37 trillion and an operating profit of KRW 4.3 trillion in the first quarter. The MX Business experienced quarter-on-quarter growth in both revenue and operating profit, driven by the success of its Galaxy S25 series, which offers an advanced Galaxy AI experience. Enhanced cost competency and component price declines contributed to solid double-digit profitability.
In the second quarter of 2025, the MX Business intends to sustain flagship-centric sales despite weak seasonality by launching the Galaxy S25 Edge. Additionally, Samsung plans to expand its AI smartphone lineup with the introduction of "Awesome Intelligence" to the Galaxy A series. In the latter half of 2025, the MX Business will focus on strengthening its foldable lineup by offering a unique AI user experience. Furthermore, Samsung will introduce new ecosystem products with enhanced AI and health capabilities and explore new product segments such as extended reality (XR).
Visual Display and Digital Appliances: Enhancing AI Features
The Visual Display and Digital Appliances businesses posted consolidated revenue of KRW 14.5 trillion and an operating profit of KRW 0.3 trillion for the first quarter. The Visual Display Business achieved solid sales of strategic products, including Neo QLEDs, OLEDs, and large models of 75 inches or more. Price increases and material cost reductions led to improved quarter-on-quarter profitability.
In the second quarter of 2025, Samsung plans to expand TV sales with its 2025 AI TV lineup, integrating advanced AI functions. As the year progresses, the company will focus on capitalizing on peak season demand through strategic collaborations with distributors, leveraging an enhanced AI TV lineup.
In conclusion, Samsung Electronics has demonstrated resilience and strategic foresight amidst global challenges, achieving record quarterly revenue and focusing on AI-driven growth across its various business divisions. The company’s commitment to innovation, coupled with strategic investments in research and development, positions it well for continued success in the evolving global market. As Samsung navigates the complexities of the tech industry, its emphasis on AI capabilities and differentiated products will likely play a crucial role in shaping its future trajectory.
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