*

Samsung's Q1 operating profit rises 1.2% to 6.7 trillion

won

*

Stockpiling of chips and phones ahead of U.S. tariffs

helps lift

earnings - analysts

*

Samsung's mobile business profit 4.3 trillion won, highest

in 4

years

*

Chip profit down 42% to 1.1 trillion won

(Recasts with forecast, adds comments in paragraphs 1-3, 9)

SEOUL, April 30 (Reuters) - Samsung Electronics ( SSNLF )

on Wednesday dropped its business outlook for the

current quarter and warned U.S. tariff policies could cut demand

for its key products such as smartphones.

The technology giant said it expected its semiconductor

business to encounter greater uncertainties throughout the year,

while its smartphone shipments faced downward pressure in the

second quarter.

"Ongoing uncertainty surrounding U.S. tariff policies

continues to pose a potential risk of demand slowdown," a

Samsung executive told analysts on an earnings call.

The world's largest memory chipmaker reported a small

rise in first-quarter operating profit as customers concerned

about U.S. tariffs rushed to purchase smartphones and commodity

chips, mitigating the impact of its underperforming artificial

intelligence chip business.

Samsung reported 6.7 trillion won ($4.68 billion) in

operating profit for the quarter ended in March, up 1.2% from a

year earlier and in line with its earlier estimate.

Samsung shares, one of the worst-performing major tech

stocks last year, fell 0.4% in line with the broader market.

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.

U.S. President Donald Trump's "reciprocal" tariffs, most of

which have been suspended until July, threaten to hit dozens of

countries including Vietnam and South Korea where Samsung

produces smartphones and displays.

Samsung said it was considering relocating the production of

TVs and home appliances in response to the tariffs.

STRONG MOBILE PROFIT

Samsung's mobile device and network business reported a 23%

rise in profit to 4.3 trillion won during the period, reaching

its highest level in four years, helped by the latest version of

the flagship Galaxy S model with AI features.

Samsung has accelerated smartphone production in Vietnam,

India and South Korea ahead of the U.S. duties, a person

familiar with the matter told Reuters earlier.

While mobile performed strongly, the chip division's

operating profit slumped 42% to 1.1 trillion won from a year

earlier despite chip stockpiling by some customers.

Samsung reported a fall in sales of High Bandwidth Memory

(HBM) - used in AI processors - due in part to U.S. export

controls on AI chips.

Analysts estimate that about one third of Samsung's HBM

revenue has come from China, and it lags behind cross-town rival

SK Hynix ( HXSCF ) in supplying such chips to Nvidia ( NVDA )

in the United States.

SK Hynix ( HXSCF ) last week logged its second-highest quarterly

operating profit in the first quarter with a 158% jump to 7.4

trillion won, boosted by strong AI-related demand.

Samsung said it expected robust demand for AI servers to

continue in the current quarter, and planned to ramp up its

enhanced 12-layer HBM3E chips during the period.

Revenue rose 10% to 79.1 trillion won in the

January-to-March period, in line with its earlier estimate of 79

trillion won.

($1 = 1,431.5000 won)