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Samsung Electronics disclosed that its second-quarter operating profit reached a provisional 89.4 trillion won — the highest across the global tech industry — but in contrast, its non-semiconductor businesses fell into a slump. The TV and home appliance business, in particular, is estimated to have seen a sharp drop in operating profit in the second quarter. There are concerns that this earnings polarization could deepen labor-labor conflict between the semiconductor and non-semiconductor divisions stemming from performance-pay gaps.
According to the securities industry on the 7th, brokerages estimated that the second-quarter operating profit of Samsung Electronics' Visual Display (VD) and Digital Appliances (DA) divisions was close to "zero." Daishin Securities and Meritz Securities estimated the divisions posted losses of 100 billion won and 200 billion won, respectively, while other more optimistic forecasts put the figure at only a 100 billion to 200 billion won profit.
Samsung Electronics' TV and home appliance businesses are suffering weak earnings due to falling global demand and rising raw material costs, compounded by the pursuit of Chinese companies. In May of this year, the company announced it would exit the home appliance sales business in China. The Mobile eXperience (MX) division, which sells smartphones, also faces inevitable declines in price competitiveness and shipments amid the fallout from chipflation (a surge in memory prices). As a result, the second-quarter operating profit of the Device eXperience (DX) division — which combines TV, home appliances, and mobile — is estimated to have fallen short of 1 trillion won.
There are also concerns about labor-labor conflict between the DX and semiconductor (DS) divisions. DX employees are growing increasingly discontented internally, protesting this year's performance-pay system centered on the DS division. The Samsung Electronics Labor Union Donghaeng, a union centered on DX employees, plans to hold a rally on the 16th near Samsung Electronics' Suwon complex in Suwon, Gyeonggi Province. The Donghaeng union said, "We intend to hold a rally to voice concerns over the unreasonable DX passing in this year's wage negotiations," adding, "(Rally attendance) is targeted at a maximum of 2,000 to 3,000 people."
To overcome the crisis, the DX division is staking its future on entering new businesses such as AI and robotics. Samsung Electronics plans to convert all its production plants at home and abroad into "AI autonomous factories" by 2030. It will introduce digital twin-based simulation across the entire process from material receipt to production and shipment, and gradually deploy AI agents for quality, production, and logistics, along with humanoid manufacturing robots such as operating bots, logistics bots, and assembly bots.
Since last month, the company has been pursuing a transition into an "AI-driven company" by combining its own AI "Gauss" with external generative AI in internal operations. It is also carrying out a structural overhaul, winding down some low-profitability businesses and concentrating on core capabilities.
Samsung Electronics has also decided to build a physical AI hub in Gumi, North Gyeongsang Province, including a 19 trillion won humanoid robot mass-production line. The DX division plans to invest about 350 trillion won by 2040 to secure future growth engines.
