Last year, Samsung Electronics set record-high quarterly and annual sales, but concerns are mounting over "non-semiconductor businesses" such as mobile, TV and home appliances. The results stem from a memory semiconductor supercycle, while smartphone and appliance businesses underperformed.
As Samsung Electronics, SK hynix and Micron focus on producing high bandwidth memory (HBM), prices of DRAM and NAND flash used in smartphones, tablets and laptops are surging. This is seen as a positive for profitability in the device solutions (DS) institutional sector, which handles the semiconductor business, but it hurts the performance of the device experience (DX) institutional sector, which handles finished goods. On top of that, the combined results of the visual display (VD) and digital appliances (DA) divisions, which handle the TV and home appliance businesses, posted losses for a second straight quarter, raising market concerns.
Samsung Electronics disclosed on the 29th that last year's annual sales came to 333.6059 trillion won and operating profit to 43.6011 trillion won. Sales rose 10.9% from a year earlier to set an all-time high. Operating profit also climbed 33.2% during the period to achieve the fourth-highest revenue on record.
Fourth-quarter sales last year were 93.8374 trillion won, up 23.8% from the same period a year earlier, marking the highest quarterly sales ever. Operating profit during the period was 20.0737 trillion won, up 209.2% year over year. It is the first case among domestic corporations in which quarterly operating profit exceeded 20 trillion won.
◇ "Semiconductor-heavy results" deepen… TV and appliances post a quarterly loss of 600 billion won
In the fourth quarter last year, the DS (semiconductor) institutional sector accounted for about 81.5% of Samsung Electronics' operating profit. The sales share was also 46.9%, showing a "semiconductor-heavy results" trend. During the period, the DS institutional sector posted about 44 trillion won in sales, up 46.0% from a year earlier, and 16.4 trillion won in operating profit, up 13.5%.
By contrast, combined sales of the mobile experience (MX) and network business institutional sectors came to 29.3 trillion won, rising only 13% from a year earlier. Compared with the previous quarter, they fell 14%. Operating profit during the period was 1.9 trillion won, down 0.2% year over year and 1.6% from the prior quarter. The company said, "Shipments decreased due to a waning effect from the launch of new smartphone models."
The TV and home appliance business institutional sector recorded an annual loss of 200 billion won last year. Fourth-quarter sales last year were 14.8 trillion won, up 2% from a year earlier and 6% from the previous quarter, but it failed to secure profitability. This business institutional sector posted a loss in the 100 billion won range in the third quarter last year. A quarterly loss last occurred in the fourth quarter of 2023 (50 billion won operating loss). In the fourth quarter last year, it showed weak performance with an operating loss of 600 billion won, a larger amount than that.
Samsung Electronics discloses combined results for the TV and home appliance businesses. The securities industry estimates that the TV business institutional sector turned a profit, but the home appliance business institutional sector underperformed, leading to an annual loss. The company said, "The TV business institutional sector saw sales expand quarter over quarter thanks to solid sales of premium products and demand during the peak season," but added, "Home appliances saw results decline due to a continued seasonal off-peak period and the impact of global tariff."
◇ Memory turmoil widens market uncertainty
Uncertainty is growing in the smartphone, TV and home appliance markets this year, prompting assessments that a performance rebound is unclear. In its fourth-quarter 2025 earnings conference call, Samsung Electronics said, "Mobile and PC may face pressure to cut component prices due to rising memory semiconductor prices," adding, "We need to monitor the possibility of shipment contraction from product price hikes and reduced memory adoption."
Regarding the smartphone business, it said, "Sales this year are expected to grow slightly and shipments to be flat," while adding, "As industry conditions such as memory semiconductor supply and demand have shifted rapidly in recent days, there is room to adjust market forecasts."
The TV business also forecast stagnant demand amid rising uncertainty. The company said, "In the first quarter, the TV market is expected to see demand stagnate at a similar level to a year earlier," adding, "After the year-end peak season, we have entered a seasonal off-peak period, and demand is falling while internal and external uncertainties have increased." It added, "We will use sports events such as the World Cup and the Winter Olympics this year to increase shipments."
Memory semiconductors are known to account for around 18% of smartphone manufacturing costs. Market research firm TrendForce projected that, after average prices for commodity DRAM surged 45% to 50% quarter over quarter in the fourth quarter last year, they could rise another 55% to 60% in the first quarter this year. Counterpoint Research also analyzed that smartphone memory prices will climb 40% through the second quarter this year, raising finished goods manufacturing costs by about 8% to 10%. Accordingly, smartphone shipments this year are forecast to fall 2.1% from a year earlier.