"Finished Product Crisis Amid Semiconductor Boom"... Samsung DX to Transform Structure Through 'AI Transition'

Samsung Electronics has brought together company-wide efforts to address the cost pressure crisis facing its finished product division, which lies behind the company's record-breaking performance. The company plans to fully redesign everything from work processes to production bases and business structure, centered on artificial intelligence (AI), in order to diversify its profit structure that has been heavily dependent on semiconductors and to establish two sustainable pillars of growth.

According to the industry on June 17, Samsung Electronics reviewed its management strategy for the second half of the year in the Device eXperience (DX) division through a global strategy council meeting that was held over two days from June 16 to 17.

Yonhap News Agency

The first key solution identified by executives at this meeting was a comprehensive AI transformation to boost work productivity. Participants strongly agreed that conventional work practices must be fundamentally redesigned in order to survive global competition. To speed up decision-making and enhance execution, Samsung Electronics previously introduced three external generative AI tools—ChatGPT, Gemini, and Claude—for employee work tasks, and has recently expanded special AI training for overseas executives to fundamentally change the way they work.

The paradigm shift at the production site was also discussed in detail. Samsung Electronics reviewed the execution of its 2030 plan to transform into an "AI autonomous factory," where AI is embedded across all manufacturing processes, allowing the factory to make its own decisions from materials intake to shipment. To support this, the company recently officially launched its self-developed high-performance computing (HPC) service and began preemptive investment in digital twin-based product development innovation.

Alongside this, an intensive restructuring strategy to decisively cut inefficient businesses was also discussed in depth. In response to the offensive by Chinese home appliance manufacturers, Samsung Electronics decided in May to completely halt TV and home appliance sales in mainland China. The company also plans to accelerate its focus on premium bespoke lineups by either discontinuing or outsourcing the production of low value-added products in the home appliances division.

Ultimately, this meeting signifies a declaration that Samsung Electronics intends to break away from its past as a hardware manufacturer and shift its non-price competitiveness toward software, services, and new businesses. With the appointment of a new VD division head in May, the company is diversifying its TV business with a greater focus on services, and synergy in the medtech (medical technology) sector through investment in the US-based genetic analysis company Element Biosciences is cited as a representative execution plan.

The business community expects that if the DX division, which has faced a complex crisis, secures differentiated AI manufacturing and work competitiveness as a result of this strategy council, Samsung Electronics will be able to establish a powerful "dual-engine" system alongside the semiconductor business, which has been driving overall company performance.

An industry official commented, "AI-driven work innovation will accelerate decision-making and organizational execution, and if AI autonomous factories can uniformly enhance quality and productivity across global production bases, the profitability of the DX division will also see a dramatic improvement."

This content was produced with the assistance of AI translation services.