As Samsung Electronics is expected to break record earnings in both the first and second halves this year, following the fourth quarter of last year, on the back of a memory semiconductor market entering a super-boom, there are projections that the DX (finished goods) institutional sector, including TVs and home appliances, will face prolonged losses and low profitability. Some also say Samsung Electronics' finished goods business stands at a critical crossroads, even if it has not drawn attention, overshadowed by the semiconductor (DS) institutional sector's earnings bonanza.
According to the industry on the 10th, the Visual Display (VD) division in charge of the TV business and the Digital Appliances (DA) division in charge of the home appliance business at Samsung Electronics are expected to post an annual loss of up to the trillion-won level this year. Analysts said price defense is becoming increasingly difficult as demand slows and tariff pressure persists, while Chinese home appliances, after the budget segment, are taking a slice of the high-end market.
Although forecasts vary by market research firms and domestic and overseas securities companies, the consensus is that Samsung Electronics' finished goods business will suffer deteriorating profitability. Kiwoom Securities projected a combined loss of 300 billion won for the VD and DA divisions in the first quarter this year. The view is that the recovery has not been fast since the start of the year. Go Young-min, a researcher at Daol Investment & Securities, also said, "Due to intensifying competition with Chinese companies, the slump in VD and home appliances is likely to continue for the time being."
The problem is that the profitability deterioration in the TV and home appliance businesses stems from structural changes rather than seasonal or geopolitical factors. As one of the world's largest home appliance makers, Samsung Electronics has long posted high spending and low revenue, and from this year the finished goods business itself is seen as being put to a major test, with losses potentially continuing. In a comprehensive crisis marked by measures against Chinese appliances, tariff risks, and component cost pressures, the key is whether a foundation for sustainable mid- to long-term growth can be established.
In TVs, as TCL and Hisense penetrate the premium market, including mini LED and ultra-large sets, analysts say Samsung's "premium-centered strategy" has become harder to defend. In particular, TCL, which has pursued a strategy of "copying" Samsung Electronics centered on QLED TVs, is tightening the reins on its chase by acquiring Sony's TV business.
By global market share, TCL is closing the gap the fastest. According to market researcher Counterpoint Research, as of November last year, TCL's global TV shipment share was 16%, just 1 percentage point (P) behind Samsung Electronics (17%). The gap, which was 4%P as recently as November 2024, narrowed significantly in one year. Some analyses said that excluding organic light-emitting diode (OLED) and looking only at liquid crystal display (LCD) TVs, the gap shrank to less than 1%P.
Chinese companies are expanding the "outer boundary of premium" by pushing mini LED TVs to the forefront. At "CES 2026," TCL put mini LED TVs front and center as its high-end lineup, absorbing demand by offering larger screens and higher brightness for the price. In the actual market, there is growing assessment that demand for Chinese mini LED TVs is increasing faster than for OLED, which Samsung and LG are focusing on.
With tariff and other trade risks, price competition, and marketing expense pressures mounting, production costs are also soaring, making it even harder to secure margins. The more the Samsung Electronics semiconductor institutional sector enjoys a boom, the more paradoxically the Samsung Electronics set (finished goods) institutional sector is hurt. That is because the production plans of the VD and DA divisions are affected by the supply of semiconductor components.
Some also analyze that as Roh Tae-Moon, head of the DX institutional sector (president) and a mobile business expert, oversees TVs and home appliances as well, those businesses will gradually be scaled down. The explanation is that within the set business, priority will be placed on mobile, including smartphones, while the TV and home appliance businesses may be run under a maximally conservative stance. In fact, after Samsung Electronics' management diagnosis and audit last year, there was analysis that the VD and DA divisions began workforce efficiency measures.
A source familiar with Samsung said, "President Roh has said he will open a new breakthrough by expanding the adoption of artificial intelligence (AI) in TVs and home appliances, but fundamentally, unlike mobile, TVs and home appliances have limits in AI's utility and usage," adding, "While AI will be used to increase the value of home appliances, a comprehensive review and strategy adjustment on production efficiency and the supply chain will also be carried out."