Samsung's Q1 2025: A Mixed Picture of Record Revenue and Continuing Chip Woes
Samsung just revealed its first-quarter 2025 financial results. The picture that emerges is one of both bright spots and significant concerns. The company recorded its highest-ever quarterly revenue, but its profit tale overall is more complicated, especially with regard to its flagship semiconductor business.
Smartphones Shine, Semiconductors Lag
On the plus side, Samsung recorded historic revenue of $57.36 billion (KRW 79.14 trillion). Its operating profit came in at $4.89 billion (KRW 6.7 trillion), a marginal increase of 1.2 percent year-over-year during the same period last year. Leading the way here was the growth in its smartphone business, driven primarily by the top-selling Galaxy S25 series. This mobile segment made about $2.99 billion in operating profit, an all-time high in four years and 23 percent higher.
But it was not plain sailing everywhere. The chip side of the business, normally a Samsung stronghold, fell flat. Chip profits allegedly declined by an alarming 42 percent. Adding to this are declining average selling prices for memory chips and increasing competition in the high-bandwidth memory (HBM) space, where rivals like SK hynix have gained traction. US export controls also added to weakening performance.
Even the foundry business, which makes chips for other companies, was impacted by softer demand and inventory adjustments. On a brighter note, Samsung's display business performed reasonably well, contributing about $770.3 million to the operating profit.
Looking Ahead: Hopes Riding on 2nm Chip Technology
Despite the problems in today's semiconductor industry, Samsung is looking forward, particularly its next-generation 2nm chip manufacturing process (Gate-All-Around or GAA technology). The company announced its ambitious plan to start large-scale mass production using this new 2nm process during the second half of 2025.
Samsung is presently engaged in refining the manufacturing yields and stabilizing the production lines for 2nm. Preliminary trial productions, perhaps for its own Exynos 2600 chip, have reportedly delivered yields of around 30 percent – a milestone they'll need to improve upon significantly. Not only is the goal to make the technology operational but also to persuade major customers, especially for high-end AI and high-performance computing (HPC) uses.
The rumor mill is abuzz with speculation regarding Samsung possibly making Qualcomm's upcoming high-end chip, the Snapdragon 8 Elite Gen 2, on this 2nm node. Winning such a contract would be an big achievement since Samsung is aggressively competing with TSMC in the foundry space.
Although Samsung is hopeful, its track record of introducing new foundry processes to market on time has been inconsistent in the past. Meeting the goal of introducing 2nm production in H2 2025 and securing key customers will be critical to the long-term health of its semiconductor business.
