Samsung Electronics is undertaking a fundamental overhaul of its home appliance (DA) business, signaling a shift from volume-driven growth to a profitability-focused strategy.
According to industry sources, the company recently outlined plans to secure sustainable growth during an internal briefing for employees. The core initiative centers on improving production efficiency by reducing low-margin product lines and expanding outsourcing.
Samsung plans to phase out in-house production of certain appliances such as dishwashers and microwave ovens, where price competition is intense and margins are relatively low. Instead, the company will rely more on external manufacturing partners to streamline costs and improve overall profitability.
The decision to shut down its Malaysia plant—one of its key global production bases since 1989—underscores a broader shift in manufacturing strategy. While the company previously focused on expanding scale and market share, it is now restructuring its operations to prioritize profitability.
The move comes amid growing pressure in the global appliance market. Chinese competitors such as Haier and Midea Group have been rapidly increasing their market share through aggressive pricing strategies. At the same time, rising raw material and component costs have added to the burden on manufacturers.
Competition in the premium segment has also intensified, particularly with LG Electronics, further pushing Samsung to refine its product strategy.
In response, Samsung Electronics is strengthening its focus on premium offerings. The company plans to expand the share of high-end products across key categories such as refrigerators, washing machines, and air conditioners under its Bespoke brand. The goal is to enhance brand differentiation and move toward a structure that prioritizes profitability over shipment volume.
At the same time, Samsung is accelerating efforts to secure new growth drivers. A key area is the heating, ventilation, and air conditioning (HVAC) business. The company is targeting the global central air conditioning market, leveraging its acquisition of Germany-based FläktGroup. The industrial and large-scale building HVAC segment is expected to grow at an annual rate exceeding 9%, making it a potentially stable source of B2B revenue.
Subscription-based services are also emerging as a major pillar. Samsung aims to go beyond one-time appliance sales by combining rentals and maintenance services, creating recurring revenue streams. This marks a transition from a hardware-centric model to a service-oriented business structure.
Organizational restructuring is also underway. Samsung has reportedly initiated a management review of its Korea sales division, which oversees domestic sales of TVs, home appliances, and smartphones. The review is being led directly by the Device eXperience (DX) division, rather than traditional support units, suggesting a comprehensive reassessment of cost structures within its sales organization.
Overall, Samsung’s restructuring of its appliance business can be summarized in three key directions: exiting low-margin operations, strengthening premium positioning, and expanding future growth areas.
An industry official said, “The appliance sector has reached a point where manufacturing alone is no longer sufficient for growth. Samsung’s latest strategy reflects a transition toward a new business model that integrates manufacturing, services, and B2B solutions.”
