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Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Chipmaker SK Hynix’s quarterly operating profit has more than doubled on strong sales of advanced memory chips used in artificial intelligence products, amid stockpiling ahead of looming US tariffs.Analysts said SK Hynix toppled arch-rival Samsung Electronics as the world’s biggest dynamic random-access memory (Dram) chipmaker for the first time during the first quarter.Operating profit rose 158 per cent to Won7.44tn ($5.2bn) in the first three months of this year, much higher than the Won6.6tn forecast by analysts polled by Bloomberg. Sales increased 42 per cent year on year to Won17.6tn. The strong earnings were driven by robust sales of high bandwidth memory (HBM) chips used in AI hardware.But the chipmaker warned of possible demand volatility in the second half due to macroeconomic uncertainties while stressing that HBM demand will be less affected by potential US tariffs on semiconductors.  “Demand uncertainty will increase because of tariff policy changes and other restrictions, but this is expediting demand for IT consumer goods as some consumers rush to buy products before prices rise,” Kyu Hyun Kim, head of Dram marketing, told analysts on Thursday.SK Hynix, a main HBM supplier to Nvidia, captured 36 per cent of the Dram market in the January-March period, followed by Samsung at 34 per cent, according to Counterpoint Research. Dram is the most widely used memory chip in PCs and servers to help process data. HBMs are made by stacking Dram chips.“The changed dynamics will probably continue for the time being as Samsung finds it difficult to catch up with SK Hynix in HBM,” said Daniel Kim, an analyst at Macquarie. “AI and HBM are fast-changing markets. It is not easy for Samsung to catch up as a latecomer.”SK Hynix widened its lead in HBM, with a 70 per cent market share in the first quarter, Counterpoint Research said. Its HBM market share will remain above 50 per cent this year, with Samsung’s share falling to below 30 per cent and US rival Micron Technology’s share rising to almost 20 per cent, according to market researcher TrendForce.The company expects Big Tech to maintain its spending on server chips to compete in AI, while new AI features in smartphones will fuel replacement demand, increasing sales of high-performance mobile Dram chips. SK Hynix still expects HBM demand to double this year.Its shares fell 0.8 per cent on Thursday morning as short selling of its stock surged to a record high of Won1.5tn so far this month, according to Bloomberg data, with the industry facing increasing uncertainties from looming US tariffs and Washington’s tougher export controls on China, as well as growing global recession fears.Foreign investors sold a net Won2.8tn of the company’s shares this month, after the stock price more than doubled over the past two years, driven by the AI boom. The shares have fallen about a fifth from a January high.“Earnings season won’t matter with larger forces at work,” Morgan Stanley analysts said in a research note. “The real tariff impact on memory resembles an iceberg, with more danger unseen below the surface and still approaching.”President Donald Trump has said tariffs on chip imports would begin “very soon”. The US has also imposed special licensing requirements on Nvidia selling its H20 chips to Chinese customers, with the US chipmaker recording a $5.5bn earnings hit this month as a result.“This can affect Hynix’s earnings, but the impact will probably be limited, given the supply shortage of high-end HBM chips,” said Macquarie’s Kim. “Positive momentum is expected for the company this year and next unless the global economy slips into recession.” More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.South Korea’s economy contracted in the first quarter, with political turmoil hitting consumer sentiment in Asia’s fourth-largest economy while business concerns grew over President Donald Trump’s tariffs on exports to the US.South Korean GDP fell 0.2 per cent quarter on quarter in the first three months of this year, according to data released by the Bank of Korea on Thursday, hours before senior ministers were set to launch trade talks with the Trump administration. The economy contracted 0.1 per cent from a year earlier. The contraction came as worries intensified about US tariffs and the Trump administration’s imposition in mid-March of a 25 per cent duty on steel imports from South Korea.The data showed domestic consumption fell 0.1 per cent in the quarter as consumers cut back on spending amid a political crisis sparked by President Yoon Suk Yeol’s shortlived attempt to impose martial law in December.Yoon was dismissed from office this month, forcing a new presidential election scheduled for June 3.  Construction and facility investment fell 3.2 per cent and 2.1 per cent, respectively, while exports declined 1.1 per cent. “The government has failed to actively respond to the slowing economy because of the leadership vacuum,” said Kim Jin-wook, an economist at Citigroup. “Korea is one of the countries hit hardest by the US-China trade war because of its big exposure to trade with both countries.”The US and China are South Korea’s two biggest trade partners. South Korea’s growth prospects have dimmed since Trump this month imposed 25 per cent tariffs on cars and vehicle parts, which together account for about a third of the country’s exports to the US. The BoK warned last week that the economy faced considerable downside risks from Trump’s trade policy. The IMF this week cut South Korea’s growth outlook to 1 per cent, down from its January forecast of 2 per cent. As well as the duties on cars, the US has introduced a blanket 10 per cent tariff on imports from South Korea.Finance minister Choi Sang-mok and industry minister Ahn Duk-geun were scheduled to meet their US counterparts in Washington later on Thursday for negotiations over tariffs. Ahn has said he will seek to reach a speedy agreement on the lifting or reduction of the vehicle duties.Acting president Han Duck-soo told the Financial Times last week that South Korea would “not fight back” against Trump’s tariffs, citing the country’s historical debt to Washington.Han said Seoul would instead seek “solutions which are more win-win for both”.South Korean customs data issued on Monday suggested the US duties were already having an impact, with exports down 5.2 per cent from a year earlier in the first 20 days of April. US-bound shipments fell 14.3 per cent and those to China dropped 3.4 per cent.While US tariffs as high as 145 per cent on Chinese goods could offer an opportunity for South Korean exporters, its trade with China could also be affected by a slowing Chinese economy, analysts warned.   “We are at the beginning of an economic crisis because of the looming global recession,” said Citigroup’s Kim. “Even if the Korea-US negotiations go well, there is no answer to the slowing economy if the US-China tariff war continues.”Seoul is preparing a Won12tn ($8.4bn) extra budget to cope with the tariffs, but economists have said it will not be enough to fully cushion the blow.The BoK, which held its base interest rate unchanged at 2.75 per cent last week, has hinted it will cut rates in the coming quarters to support slowing growth. The South Korean currency fell to a 16-year low against the dollar this month, while high household debt has also weighed on domestic consumption.“More policy support is needed to shore up the economy, but the BoK won’t be able to hit the accelerator because of the [exchange rate and household debt] barriers,” said Park Jeong-woo, an analyst at Nomura. More

Businesses dealing with the early stages of President Donald Trump’s tariffs are looking for ways to pass increasing costs onto consumers, according to the Fed Beige Book report.
Broadly speaking, the report characterized economic growth as “little changed” from the March 5 report, though it noted that “uncertainty around international trade policy was pervasive.”

In an aerial view, a container ship is seen docked at the Port of Oakland in Oakland, California, on April 18, 2025.
Justin Sullivan | Getty Images

Businesses dealing with the early stages of President Donald Trump’s tariffs are looking for ways to pass increasing costs onto consumers, according to a Federal Reserve report Wednesday.
As Trump ordered against-the-board levies on U.S. imports and higher duties on Chinese products, the Fed’s Beige Book indicated how they plan to proceed. Companies reported getting notices from suppliers about rising costs, and they looked to find ways not to absorb the increases while noting uncertainty over the ability to pass them along to customers.

“Most Districts noted that firms expected elevated input cost growth resulting from tariffs,” the report said. “Many firms have already received notices from suppliers that costs would be increasing.”
Broadly speaking, the report, which comes out about every seven weeks, characterized economic growth as “little changed” from the March 5 report, though it noted that “uncertainty around international trade policy was pervasive across” the Fed’s 12 districts.
Prices generally rose during the period, which included Trump’s April 2 “liberation day” announcement of the blanket tariffs. Employment was “little changed” amid falling headcounts in government jobs.
“Firms reported adding tariff surcharges or shortening pricing horizons to account for uncertain trade policy,” the report stated. “Most businesses expected to pass through additional costs to customers. However, there were reports about margin compression amid increased costs, as demand remained tepid in some sectors, especially for consumer-facing firms.”
In the New York area, firms reported rising prices particularly in food and insurance along with construction materials. Manufacturers and distributors said they already are adding surcharges due to shipments.

There also were signs of problems in the trade dispute with Canada. Tourists are booking fewer hotel rooms in New York City and at least one tech firm reported losing business contacts in Canada.
“The outlook for service sector firms worsened noticeably, with contacts anticipating a sharp decline in activity in the coming months. Service sector firms reported a major pullback in planned investment,” the report said.
The report also noted the impact that the Elon Musk-led Department of Government Efficiency has had on employment in the Washington, D.C. region. DOGE has sought to pare back the federal workforce, laying off thousands and offering buyouts to others.
While the employment picture overall was “unchanged” for the period, “many federal government workers were laid off or put on administrative leave in recent weeks.”
“These cuts to the federal workforce have impacted businesses throughout the entire district. In addition, federal contractors have laid off workers in response to spending cuts. For example, a research organization headquartered outside the DC-region laid off workers due to contracts being cancelled. Similarly, a Northern Virginia consultancy reduced headcount by 25 percent due to losing half their contracts,” the report added.
Elsewhere in the report, service organizations dependent on government support noted difficulties since the White House began culling through agencies that get federal aid. The report specifically cited food banks in New York as seeing cuts in programs and personnel.
“Contacts at non-profits and other community-based organizations expressed significant concern about the future of federal funding and services support, creating challenges in staffing, strategy, and planning,” the report said.
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Shoppers walk through the King of Prussia Mall, as global markets brace for a hit to trade and growth caused by U.S. President Donald Trump’s decision to impose import tariffs on dozens of countries, in King of Prussia, Pennsylvania, U.S., April 3, 2025. 
Rachel Wisniewski | Reuters

Consumer spending is rising at a faster clip this month as everyday Americans rush to make purchases before President Donald Trump’s full tariff plan takes effect, data released Wednesday from JPMorgan shows.
Spending through the first 15 days in April climbed about 3.8% from the same period a year ago, JPMorgan found. Spending in March increased about 2.7% from the comparable month a year ago.

The pickup in spending shouldn’t be construed as heralding faster economic growth, however. “April data may reflect a pullforward of discretionary spending on big-ticket items if consumers tried to lock in lower prices before tariffs went into effect,” JPMorgan analysts led by Richard Shane wrote to clients in a note on Wednesday.
Much of the April gain came from discretionary spending, which rose by 4.3% in the first 15 days year-over-year, versus 2.9% growth in non-discretionary spending.
Psychological impact
JPMorgan’s data offers early hard evidence of how Trump’s plan for steep tariffs on imports has affected the psyche of American consumers. While Trump placed many of his planned levies on a 90-day pause soon after announcing them, anecdotal reports show Main Street consumers bracing for what many view as a seismic shift in global trade.
To be sure, JPMorgan noted that some of the growth in spending may have also been tied to the Easter holiday, which fell almost three weeks later in 2025 than in 2024. The analysts also pointed to sliding gasoline prices as a possible driver of increased discretionary spending.
Still, the potential for some binge buying before the full effect of Trump’s tariff policy is felt has altered the short-term economic outlook for small business owners and policymakers alike.

At first, “activity might look artificially high … and then by the summer, might fall off — because people have bought it all,” Austan Goolsbee, president of the Chicago Federal Reserve, recently told CBS in reference to the acceleration of spending by consumers trying to get ahead of tariffs. A temporary bump in spending may lead to a corresponding drop-off in spending during the summer, he said.
Inventory stockpile
Goolsbee also cited evidence of businesses stockpiling inventory to last two to three months and said so-called preemptive purchasing appeared more common among companies than consumers.
Shippers have front-loaded cargo heading to the U.S. to get ahead of any potential increase in taxes as a result of the tariffs, according to CNBC’s Supply Chain Survey. Products from China, which face a cumulative tariff rate of 145%, accounted for much of the cargo shippers were sending to the U.S. earlier than planned.
This idea of an expedited spending timeline by consumers is popping up on first-quarter corporate earnings calls, too, as Wall Street analysts study whether demand for products ranging from smartphones to automobiles could fall later.
AT&T finance chief Pascal Desroches said Wednesday that customers have upgraded devices at a faster clip than expected since Trump unveiled his tariff plan.
Capital One CEO Richard Fairbank told analysts on Tuesday that upticks in spending on electronics and cars looked like signs of consumers speeding up purchases before the full tariff plan goes into effect. Ally Financial CEO Michael Rhodes said last week that a pull-forward in used car purchases could account for what he called strong volume recently seen by the auto loan provider.
Capital One and Ally’s anecdotes dovetail with data from Cox Automotive, which found U.S. vehicle supply plunging as consumers rushed to purchase.
The historical record shows that an acceleration in spending to beat higher prices later on doesn’t amount to much over the long term. For example, Japanese consumers in 1997 rushed to buy before a consumption tax rose to 5%, and again in 2014 and 2015 before the tax climbed to 8% and 10%, respectively. Afterward, however, spending either fell or flat lined, according to a Federal Reserve Bank of Richmond study.
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