Samsung Electronics is reportedly initiating a large-scale restructuring of its home appliance division aimed at reversing declining profitability by increasing outsourced production and streamlining operations. According to South Korean media outlets including Maeil Business Newspaper and Hangyung, Samsung held a high-level meeting in early April 2026 to establish plans for bolstering competitiveness in the home appliance sector.
The core strategy reportedly involves gradually reducing production lines for small-to-medium appliances such as dishwashers and microwaves, shifting these products to OEM or ODM models. Samsung also plans to close its Malaysian factory that has long produced low-cost appliances, aiming to enhance overall production efficiency.
Samsung reportedly began conducting an operational review at its South Korea headquarters responsible for domestic sales in March 2026. This follows a previous diagnostic on the Visual Display (VD) division in 2025, extending the scope from manufacturing units to frontline sales operations.
Industry experts view Samsung's moves as more than mere cost-cutting measures — they represent a comprehensive transformation focused on profitability, involving a full redesign of the home appliance business structure.
The company will outsource low-priced small appliances, exit China's home appliance and TV sales markets, shut down the Malaysian plant, and undertake a sweeping reorganization of global production and sales networks. Concurrently, it will implement intensive management reviews within the South Korean headquarters, overseeing domestic marketing and sales.
Samsung intends to maintain in-house production of larger, competitively priced appliances with strong technological advantages while expanding investments in high-growth areas including AI-enabled premium appliances, heating and cooling systems, B2B solutions, and subscription services.
Samsung's DX division operating profit peaked at KRW17.3 trillion (US$11.7 billion) in 2021 but plummeted to KRW1.9 trillion by 2025, representing a 90% erosion of profitability over four years. Analysts attribute this sharp decline to fading COVID-19 demand boosts, sluggish market conditions, aggressive competition from China, and chip cost inflation pressures.
The crisis has deepened into 2026. Both the DA and VD divisions, which fell into losses in the fourth quarter of 2025, face uncertain prospects for recovery. Even the Mobile eXperience (MX) unit is feeling the impact of soaring memory prices, fueling speculation about the unprecedented risk of simultaneous losses across all business units.
Industry observers expect the ongoing production equipment adjustments and corporate restructuring aligned with the current reviews to mark a critical turning point for Samsung's finished goods divisions, signaling a decisive effort to improve organizational health and performance.
Article translated by Charlene Chen and edited by Jerry Chen
