Samsung Moves to Overhaul Its Home Appliance and TV Businesses

The company is shifting low-margin appliances to outsourced production and focusing on premium products

Reports of a possible China exit add momentum to a broader restructuring

Lee Jae-yong, executive chairman of Samsung Electronics, attends the Korea-Brazil Business Forum at Lotte Hotel in Jung District, Seoul, on Feb. 23. <Newsis>

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Samsung Electronics is moving to overhaul its home appliance and television businesses. The strategy is one of selection and focus: shift unprofitable appliances to outsourced production and concentrate resources on premium products. Reports that the company may withdraw from the Chinese market have added momentum to the restructuring.

According to industry officials on April 29, Samsung Electronics’ Digital Appliances division, which oversees the company’s home appliance business, recently held a management meeting with employees and shared a restructuring plan. At the center of the plan is the closure of production lines for low-margin appliances and the outsourcing of production to external manufacturers.

As a result, some lower-priced appliances, including microwave ovens and dishwashers, will be shifted to OEM or ODM production. Samsung is also said to be considering the closure of its Malaysia plant, which has served as one of its major overseas production bases since 1989.

One industry official said outsourcing appliance production is already a widely used practice across the sector, depending on product characteristics and profitability.

“It appears to be a move to concentrate manufacturing capabilities on stronger product categories through selection and focus,” the official said.

There are also signs of a reorganization of Samsung’s China business. Japan’s Nikkei reported that Samsung Electronics could notify business partners and local employees as early as this month that it will suspend its China business, gradually dispose of inventory and withdraw from the market by the end of the year.

Samsung Electronics said in response that “nothing has been decided at this time.” Still, Yong Seok-woo, president of Samsung’s Visual Display division, recently said at a media briefing for new products that “it is true that the China business is difficult.” He added that the company was “looking at the business in various forms” and that the process was “currently underway.”

Weakening Profitability Drives the Restructuring

The restructuring of Samsung’s home appliance and TV businesses is rooted in deteriorating profitability. The company’s Visual Display and Digital Appliances divisions recorded operating losses for two consecutive quarters, in the third and fourth quarters of last year. In the fourth quarter in particular, operating losses widened to 600 billion won, resulting in an annual loss of 200 billion won.

Above all, Chinese home appliance makers are mounting a fierce challenge. According to Counterpoint Research, Samsung Electronics ranked first in the global TV market last year by shipments, with a 15 percent share. But China’s TCL and Hisense followed closely, with shares of 13 percent and 12 percent, respectively.

Samsung’s presence is especially weak in China. According to another market research firm, AVC, Samsung’s market share in China as of early this month stood at about 3.6 percent for TVs, 0.4 percent for refrigerators and 0.4 percent for washing machines.

“China has a structure in which the government strongly supports domestic brands,” said one industry official who asked not to be named. “With the global business environment also becoming increasingly difficult, foreign companies have little choice but to reassess the viability of their businesses.”

Given these external conditions, a short-term improvement in profitability is unlikely to be easy. Lee Jong-wook, head of Samsung Securities’ tech team, said Samsung’s home appliance and TV divisions would likely have to endure low profitability for some time because of intense competition and rising costs. Kim Rok-ho, an analyst at Hana Securities, also said continued losses this year appear unavoidable.

Samsung is therefore expected to accelerate efforts to improve the overall structure of the business. The company plans to focus its production capabilities on higher-margin large appliances, including refrigerators, washing machines and air conditioners equipped with AI features. At the same time, it is looking for new growth engines in heating, ventilation and air conditioning, or HVAC, as well as in the business-to-business market.

Market attention is now turning to Samsung Electronics’ first-quarter 2026 earnings conference call, scheduled for the morning of April 30, and to what the company may say about the restructuring of its home appliance and TV businesses.

-This article was translated by ChatGPT. (이 기사는 챗GPT가 번역했습니다.)