Samsung Electronics will undertake a sweeping overhaul of its business structure, including winding down low-margin home appliance production lines and increasing the share of outsourced manufacturing.
According to the industry on the 28th, the DA Division of Samsung Electronics recently said at a management briefing that it would shut down production lines for some items, including dishwashers and microwave ovens, and withdraw from its manufacturing base in Malaysia.
This is seen as a decision to overcome structural constraints such as aggressive low-price competition from Chinese appliance makers and rising costs. Instead, Samsung Electronics plans to focus its capabilities on premium strategic products represented by "Bespoke" and quickly shift its portfolio to heating, ventilation and air conditioning (HVAC), B2B, and appliance subscription services, which have strong growth potential. In particular, it aims for qualitative growth based on profitability by leveraging high value-added technologies such as AI appliances and liquid-cooling solutions.
Samsung Electronics has gone all-in on a "fundamental reform" to break through the limits of its appliance business. The decision to close its Malaysia plant, in operation since 1989, is interpreted as a strong commitment to move away from a traditional manufacturing-centered model and reorganize around high-profit core businesses.
Samsung Electronics' goals ahead are clear. Beyond simply selling goods, it plans to pursue ▲ securing a commanding lead in AI appliance quality ▲ expanding the HVAC business targeting global data centers ▲ diversifying its business model based on subscription services.
In particular, starting with the acquisition of FläktGroup, it plans to increase market share in the central HVAC markets of Europe and North America and strengthen a B2B-focused lineup to create a breakthrough in performance. Kim Cheol-gi, head of the DA Division, emphasized "rapid execution through selection and focus," expressing a sense of crisis.