Samsung Electronics reported its Q1 2025 earnings on April 30, revealing a sharp 42% drop in semiconductor profits, as U.S. export controls weighed on high-end chip sales. While overall company performance remained strong, with consolidated revenue reaching a record KRW 79.14 trillion (up 10% YoY) and net profit rising 22% to KRW 8.2 trillion, its semiconductor division struggled under geopolitical and market pressures.

The Device Solutions (DS) Division, which handles Samsung's semiconductor business, posted KRW 25.1 trillion in sales and KRW 1.1 trillion in operating profit, a significant year-on-year decline. The drop was largely due to falling average selling prices and weaker sales of high-bandwidth memory (HBM) chips — key components for AI applications — as export restrictions disrupted demand from overseas customers. Additionally, some clients delayed purchases in anticipation of Samsung's upcoming HBM3E 12-layer products.

In a statement, Samsung acknowledged the growing difficulty in forecasting future performance due to worsening global trade conditions and macroeconomic uncertainty. However, the company remains committed to growth, outlining a plan to ramp up production of its enhanced HBM3E products and accelerate the transition to 8th-generation V-NAND to improve cost competitiveness.

The company also highlighted progress across its other business units. The System LSI division saw modest gains, supported by rising demand for 200-megapixel sensors and new SoC design wins. The Foundry business focused on stabilizing 2nm process technology and securing advanced-node orders for AI and high-performance computing applications, while aiming to begin 2nm mass production in the second half of 2025.

Looking ahead, Samsung expects AI-related demand to drive semiconductor growth, especially as new GPUs enter the market. In mobile and PC memory, the company plans to address the rise of on-device AI with its advanced LPDDR5X products.

Despite near-term challenges, Samsung's record-high R&D spending — up 16% year-on-year in Q1 to KRW 9 trillion — signals its intention to stay competitive in an increasingly uncertain global tech landscape.