Samsung Electronics posted record first-quarter results, but the company’s growing reliance on semiconductors underscored weakness in its device businesses, including mobile, TVs and home appliances.
In its finalized earnings release on Wednesday, Samsung said first-quarter revenue rose to 133.9 trillion won and operating profit to 57.2 trillion won, the highest quarterly performance ever recorded by a South Korean company. Most of the operating profit, however, came from the semiconductor (DS) division, widening the gap in contributions across businesses.
The DS division reported revenue of 81.7 trillion won and operating profit of 53.7 trillion won, supported by expanding investment in artificial intelligence infrastructure and rising memory prices. Demand for high-value products such as high-bandwidth memory, or HBM, led results, and continued mass production of next-generation products strengthened its technology edge.
Outside chips, performance was weaker. The mobile (MX) business did not see as much profitability improvement as expected despite higher flagship sales, as rising component prices, a weak won and tariff burdens limited gains. Intensifying competition in midrange and low-end models and softer replacement demand also weighed on results.
The TV business (VD) faced similar conditions. Premium sales held up, but a global consumption slowdown and tougher price competition limited its earnings contribution. Home appliances also saw only modest margin improvement due to higher costs and tariff effects.
Samsung said its network business struggled as telecom carriers cut investment, while its display business weakened on softer demand for small and mid-sized panels. Harman’s profit declined due to seasonal factors and cost pressures.
The company’s results reflected diverging cycles: semiconductors benefited from structural demand tied to AI servers and data centers, while device businesses faced pressure from slower global consumption, interest-rate burdens, higher costs and tariff uncertainty.
Samsung is also pursuing changes to its business mix, including expanding business-to-business operations. It aims to strengthen corporate-focused areas such as network equipment, displays and heating, ventilation and air conditioning, or HVAC, to build earnings that are less sensitive to economic swings.
For new growth, Samsung is diversifying around Harman, which handles automotive and audio. The company cited in-vehicle infotainment, premium audio and automotive solutions as potential long-term profit sources, while also developing AI-based data center cooling solutions and smart home-linked businesses as mid- to long-term growth engines.
Samsung said it plans to broaden its profit base through a premium-product strategy, cost efficiency and a larger B2B footprint. Industry observers said the pace of restructuring outside semiconductors will be a key factor for longer-term earnings stability.
* This article has been translated by AI.
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