Samsung Electronics' Record-Breaking Results Driven by Semiconductors... Earnings Rise Despite Weakness in TVs and Home Appliances

Samsung Electronics has reported record-breaking quarterly results, but there is a stark contrast between its Device Solutions (DS) division, responsible for semiconductors, and its Device eXperience (DX) division, which handles TVs and home appliances. While the vast majority of the company’s earnings stemmed from the semiconductor segment riding a “supercycle,” the DX division, facing declining profitability, posted relatively lower numbers. As the semiconductor boom continues, annual operating profit is projected to reach the 300 trillion won range, and the performance gap between business units is expected to persist for the time being.

According to the company’s first-quarter results announced on April 30, Samsung Electronics achieved over 50 trillion won in operating profit from the DS division alone, accounting for nearly 94% of total operating profit. Driven by semiconductors, the company not only posted its highest-ever quarterly performance, but this quarter’s profit also surpassed the entire operating profit of last year (43.53 trillion won).

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This extraordinary performance is due to a boom across the entire semiconductor industry. Explosive demand for memory semiconductors driven by the proliferation of artificial intelligence (AI) and ongoing supply shortages have contributed to increased sales for memory manufacturers. According to industry sources, in the first quarter of this year, the price of general-purpose DRAM for PCs soared by more than 90%, with NAND flash prices also jumping by over 90%. Samsung Electronics is said to have doubled its average DRAM prices in the first quarter and raised DRAM prices by another 30% or so in the second quarter.

Industry observers believe that Samsung Electronics’ historic boom will continue throughout the year. With memory semiconductor shortages expected to persist into next year, Samsung Electronics is expanding orders across all business areas, including memory, foundry (semiconductor contract manufacturing), and packaging. Earlier this year, Samsung Electronics announced the world’s first mass shipment of sixth-generation high-bandwidth memory (HBM4) to customers. As the supply of HBM3E and HBM4 begins to be fully reflected, revenue growth is projected to accelerate even further. In addition to memory, the foundry business is also expected to sequentially reflect large-scale orders from clients such as Tesla, Qualcomm, and Nvidia, which have continued since last year.

Samsung Electronics Pyeongtaek Campus is bustling with people commuting in and out on continuous shuttle buses. Photo by Dongju Yoon

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On the other hand, the home appliance segment, including TVs, is expected to face ongoing challenges. The DX division, which recorded an operating profit in the 3 trillion won range, saw a slight improvement in the Mobile eXperience (MX) and Network business units compared to the previous quarter, but operating profit in the Visual Display (VD) and Digital Appliances (DA) business units declined. The biggest threat is the aggressive expansion of Chinese appliance manufacturers. In recent years, these companies have rapidly grown, dominating the low-priced product market with overwhelming price competitiveness, and have now entered the premium segment with OLED TVs and AI-powered appliances, threatening the position of domestic brands.

In fact, profitability in the DX division has been on a continual downward trend. An analysis of Samsung Electronics’ annual business reports over the past decade shows the operating margin for the DX division dropped into single digits in 2022 at 7%, then fell to 8.46% (2023), 7.11% (2024), 6.84% (2025), and is projected at 6% (2026). While flagship products like the Galaxy S25 have driven up sales, the division has been hit by fierce price competition with Chinese companies, rising raw material prices due to the Iran war, and the impact of higher memory prices. According to industry sources, the DX division is projected to post its first annual operating loss this year.

As a result, high-intensity restructuring measures such as workforce reductions and reassignments are reportedly being considered in some business units. The company is also pursuing restructuring of its domestic and overseas operations. The DA business unit recently informed employees of plans to shut down certain production lines for appliances such as dishwashers and microwaves and to switch to outsourced manufacturing. It is also reported that the company will close its Malaysian production plant and withdraw from sales of home appliances and TVs in China.

Another variable for future performance is the labor union’s planned strike next month. The Samsung union has announced a general strike lasting 18 days from May 21 to June 7. Industry sources are concerned that, if realized, the strike could disrupt production on semiconductor lines. Should the union proceed with the general strike, daily losses could reach as much as 1 trillion won, and there are concerns about instability in the global semiconductor supply chain.

Nonetheless, despite internal turmoil, the outlook for annual operating profit continues to rise thanks to the strong semiconductor performance. Meritz Securities previously projected Samsung Electronics’ operating profit for this year at 322 trillion won, with forecasts reaching 464 trillion won in 2027. Kim Dongwon, Head of Research at KB Securities, stated, “AI investment is likely to continue an unprecedented period of growth for the foreseeable future. With long-term robust demand for memory expected through 2030, Samsung Electronics, which secures the largest memory production capacity and supply capabilities, is forecast to be the ultimate winner.”

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