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Samsung (005930.KS) warned that US tariffs will affect demand for its products, including smartphones and chips, as it released it latest financial results.
The South Korean electronics giant posted what it said was record quarterly revenue of £41.6 billion for the three months to March 31, and saw operating profit rise 1.5%, which the firm said was down to strong phone and semiconductor sales – both markets in which it is among the global leaders.
However, executives warned of “ongoing uncertainty” around US tariff policies and said it poses a “potential risk of demand slowdown” later in the year.
A suspension of the “reciprocal tariffs” imposed by US President Donald Trump on countries around the world has seen some customers move up their orders, the tech giant said, but warned this could have a negative effect in the second half of the year.
The steepest tariffs, which have been delayed until July on most countries except China, will also hit countries such as Vietnam and South Korea, where Samsung produces its smartphones, displays and other products.
US restrictions on the sale of artificial intelligence (AI) chips to China – a key market for Samsung – are also having an impact.
Repeated references to “uncertainties” from the firm in its results reporting also highlighted the changing economic landscape, with President Trump having granted some electronics and semiconductors an exemption from his tariffs.
However he also warned this was only temporary and new levies on those products are likely to be introduced soon.
Samsung did not give an earnings outlook for the current quarter, saying the current economic climate and “global trade tensions” make it difficult to predict future performance.
Many tech firms, including rival Apple (AAPL), are scrambling to adjust to the changing trade environment and potential impact of tariffs on the key countries in their supply chains, most notably China, which is the focal point of President Trump’s highest tariffs.
As a result, there have been reports that firms are pushing to move production to other parts of Asia in an effort to avoid the incoming duties.
Apple is scheduled to report its latest quarterly financial results on Thursday, and is likely to give its own overview on the impact of the tariffs so far, and what it could mean for electronics demand and pricing.