Samsung Electronics Restructures Home Appliance Business for Profitability, Launches Management Review of Sales Division

Samsung Electronics is restructuring its home appliance business, including shutting down low-profit production lines and shifting to outsourcing.

The Samsung Electronics building in Seocho-gu, Seoul. Photo by Yonhap News Agency

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According to the industry on April 28, the DA Division, which is responsible for Samsung Electronics' home appliance business, recently held a management briefing for employees, presenting a future vision aimed at enhancing profitability and securing sustainable growth engines through rapid business restructuring.

The plan includes closing certain appliance production lines-such as those for dishwashers and microwave ovens-and converting them to outsourced manufacturing. The company has also decided to shut down its factory in Malaysia, which has served as a major overseas production hub since 1989.

This initiative aims to overcome the structural limitations of the home appliance business and transform it into a growth-oriented, profit-driven operation. Samsung Electronics' home appliance division has recently faced difficulties due to aggressive price competition from Chinese companies, as well as rising costs of key components, such as semiconductors, and increased logistics expenses.

To drive business innovation, Samsung Electronics plans to focus even more on products that deliver the best experience and quality, and to accelerate its global heating, ventilation, and air conditioning (HVAC) business. The HVAC business, identified as a future growth engine, will strategically target the central HVAC segment, which is expected to grow at an annual rate of over 9%, in partnership with Germany-based FlaktGroup, acquired last year. The company will expand its HVAC customer base for global artificial intelligence (AI) data centers across Europe, North America, and Asia, and will continue to strengthen its liquid cooling solutions to boost its data center cooling capabilities.

The company will also expand high-growth businesses such as business-to-business (B2B) services and subscription offerings. Leveraging its AI home solution, SmartThings, Samsung Electronics will develop B2B-specialized product lineups and increase dedicated personnel. The company also plans to accelerate sales of its home appliance subscription services in Korea and swiftly pursue overseas market entry.

To this end, Samsung Electronics is focusing its resources on strategic products that hold top-tier global competitiveness, such as the 'Bespoke' series of washing machines, refrigerators, and air conditioners. In the first half of this year, the company released new AI-powered appliance products-including refrigerators, washing machines, air conditioners, robot vacuum cleaners, and garment care systems-designed to deliver optimal experiences.

Meanwhile, since late last month, Samsung Electronics has also initiated a management review of its Korea Business Division, which oversees domestic sales and operations of TVs, home appliances, and smartphones. Notably, this review is being led by the management review team within the Device eXperience (DX) division, rather than the Business Support Office's management review unit. Observers note that, as an extension of last year's management review of the Visual Display (VD) Division led by the Business Support Office, the current review is particularly significant as it expands its scope beyond production departments to include sales operations.

Chulgi Kim, Head of the DA Division, stated, "We are approaching this year with a sense of urgent crisis, believing it is our last 'golden time' to pursue structural innovation in our home appliance business. We must execute choices and focus with maximum speed to transform the business into a profit-driven growth operation."

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