Park Soon-chul, chief financial officer (CFO) of Samsung Electronics, said during a conference call for the first-quarter earnings announcement held on the 30th that regarding the tariff risk from Trump, "It’s a situation that makes it difficult to accurately predict business impacts and develop countermeasures," and that the company will push forward with strategies to maximize revenue by business unit.
CFO Park noted, "We are closely monitoring the trade policies of major countries and striving to minimize negative impacts by communicating closely with related countries," and added, "We will utilize Samsung Electronics' strengths of multiple global manufacturing bases and customer management capabilities to respond quickly to necessary situations."
The Donald Trump administration announced earlier this month that it would postpone the reciprocal tariffs for 90 days while only applying a 10% general tariff worldwide so far. However, it has indicated that item-specific tariffs may be applied to semiconductors and electronic devices. In this regard, CFO Park evaluated, "While Samsung Electronics' core products, such as semiconductors, smartphones, and tablets, will be exempt from reciprocal tariffs, it is uncertain what additional situations may arise as item-specific tariff investigations on these product categories are currently ongoing."
As a tariff response measure by business unit, for the mobile experience (MX) department, which oversees the smartphone business, the plan is to enhance revenue in anticipation of rising component costs. CFO Park stated, "With the expected price increase due to the imposition of tariffs on semiconductor derivatives, we plan to secure revenue by expanding sales of flagship smartphones and new Edge products."
The visual display (VD) and home appliances (DA) departments, responsible for the TV business, are planning to minimize the impact of tariffs by considering the transfer of production sites for some quantities by utilizing global manufacturing bases if necessary. Initially, they will focus on expanding high-value premium products to increase revenue.
The device solution (DS) division, responsible for semiconductors, stated that it will closely monitor the prospects of U.S. semiconductor tariff policies while continuously reviewing response plans based on various scenarios.
As the U.S. tariff policy and stronger export controls toward China overlap, the outlook for Samsung Electronics' core semiconductor business for the second half of the year has become clouded. Kim Jae-jun, vice president of Samsung Electronics' memory division, said, "Demand uncertainty is increasing for the second half of the year," and noted, "Especially in the second quarter, some customers have made early purchase requests to build finished goods in anticipation of the tariff suspension effect, which could have a somewhat negative impact on demand in the second half of the year."
However, Samsung Electronics emphasized that if uncertainties decrease, such as determining the direction of tariff policies, the performance will show a 'U-shaped' flow. CFO Park remarked, "The market conditions for the second quarter and second half are expected to be more uncertain than ever," but added, "If the current uncertainties are resolved, overall performance is expected to improve as we move into the second half."
At the same time, CFO Kim stated, "Based on the experience and capabilities gained from overcoming numerous crises, we are meticulously preparing countermeasures for each situation to manage risks, and we are reviewing methods to strategically and flexibly utilize global production bases and sales points across the globe according to the situation."
The high-bandwidth memory (HBM) business, which is of great interest to the market, faced difficulties in the first quarter but is expected to improve as the year progresses. Vice President Kim stated, "Considering the uncertainties due to tariffs and export regulations on AI semiconductors, there may be some volatility in improving sales in the second half," but added, "Samsung Electronics' HBM sales volume is expected to gradually recover each quarter after hitting a low in the first quarter with the expansion of HBM3E improved product sales."