Samsung Weakens Financial Expectations for 2025 and Says US Tariffs Are to Blame

Samsung says that United States tariffs could decrease the demand for its products, including smartphones and memory chips. During an earnings call, Samsung warned that political and economic uncertainties make predicting the company’s financial performance very challenging.

The South Korean tech giant is well known for its diverse consumer electronics products, including Galaxy smartphones, televisions, and storage devices. Samsung is also the world’s largest memory chipmaker.

Samsung’s first-quarter revenue reached a record high of 79 trillion won ($55.4 billion). However, macroeconomic uncertainties temper the company’s expectations for the next quarter and the rest of 2025. Samsung’s overall first-quarter operating profit rose 1.2 percent, reaching 6.7 trillion won ($4.7 billion). However, the company anticipates a challenging year and is cautiously approaching its projections.

While many of President Trump’s controversial reciprocal tariffs were suspended until July, steep tariffs on China continue to impact many tech companies, including Samsung.

“Steep U.S. tariffs on Chinese goods and toughening restrictions on AI chip sales to China, Samsung’s top market, threaten to dampen demand for some of the electronics components the company produces such as chips and smartphone displays,” Reuters reports. Analysts believe that about one-third of Samsung’s High Bandwidth Memory (HBM) products go to China for use in AI processors.

In response to tariffs, Samsung is considering moving the production of some of its products elsewhere, including TVs and home appliances, but such moves cannot occur overnight and the relatively chaotic tariff rollout makes it challenging for companies to make significant long-term plans.

“We believe that demand uncertainties are growing in the second half as a result of recent changes in tariff policies in major countries, and strengthening of AI chip export controls,” says Kim Jae-june, Samsung vice president in the company’s memory division.

“There are a lot of uncertainties ahead of us,” agreed KL Roh, an executive vice president at Samsung.

The company’s CFO, Park Soon-cheol, added, “we cautiously expect the overall performance to gradually improve as we move into the second half, assuming the easing of current uncertainties.”

However, despite Park Soon-cheol’s optimism, market analysts remain bearish.

“With pull-in demand still ongoing and macro uncertainty lingering, the explanation for the ‘first-half low, second-half rebound’ outlook was lacking,” Ryu Young-ho, a senior analyst at NH Investment & Securities told Reuters.

Concerning Samsung’s chip business specifically, operating profit fell a staggering 42% “due to declines in average selling price,” Bloomberg reports.

Samsung is scrambling to recoup as much as possible and strengthen its position. The company spent 9 trillion won ($6.3 billion) in research and development in the first quarter of this year, up 16% compared to a year ago.

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