Home appliances and mobile phones sold well, but chipflation dragged it down... DX posts first-ever loss [Samsung's record-breaking Q2 results]

Samsung Electronics' Device eXperience Division (DX Division), which centers on the home appliance and mobile phone businesses, posted a quarterly loss for the first time since the current divisional structure was launched in December 2021, with a loss of 800 billion won.
The biggest reason for the loss was identified as chipflation, or the sharp rise in semiconductor prices. While higher chip prices delivered unprecedented results for Samsung Electronics' Device Solutions Division, they pushed the other half of the company, the DX Division, into the red. It is the paradox of Samsung Electronics as a diversified electronics company. Securing new businesses that can become the DX Division's next flagship, along with an early rebound in earnings, is seen as a key challenge for DX Division head Roh Tae-moon.
According to Samsung Electronics on the 30th, the MX Division, which handles mobile phones, posted its first-ever loss in the second quarter, with an operating loss of 700 billion won. The VD Division, which had already posted losses in the third and fourth quarters of last year, and the DA Division, which makes home appliances such as refrigerators and washing machines, also fell back into the red in the second quarter, with a loss of 100 billion won. Combined operating loss for the three divisions in the second quarter came to 800 billion won.
The one encouraging point is that DX Division revenue increased despite the operating loss. Revenue for the division in the first half rose 6% from a year earlier to 100.7 trillion won, surpassing 100 trillion won for the first time on a first-half basis. Both the MX Division and the VD and DA divisions also posted higher revenue than a year earlier.
Inside the DX Division, there is a sense of frustration over this result. The company argues that while product development and sales went well, the burden from semiconductor prices was simply too heavy. In the case of mobile phones, semiconductors account for 40% to 50% of total production costs. Even Samsung Electronics, which also operates a semiconductor business, has not been able to escape the impact of chipflation, just like global IT companies such as Apple and NVIDIA. According to Counterpoint Research, memory prices jumped 40% to 50% in the fourth quarter of last year and then rose another 40% to 50% in the first quarter of this year.
The problem is that demand for TVs and home appliances is stagnating worldwide, and chipflation is likely to continue for some time. That makes an early rebound in DX Division earnings difficult. Analysts say the biggest task is to find new growth businesses that can become the division's next flagship, while also identifying new paths for each business unit.
Samsung Electronics pointed to its push into humanoid robots, a major shift toward artificial intelligence (AI), expansion of premium products, and diversification of services such as subscriptions.
During its conference call that day, Samsung Electronics said, "We will expand our highly intelligent, multipurpose humanoid robot business." It added, "We will build a robot pilot production line and a data factory in Gumi, North Gyeongsang Province, and will also pursue cooperation with overseas startups as well as mergers and acquisitions (M&A)." The company also said, "We are proactively preparing next-generation robot semiconductor solutions that combine high-bandwidth, low-power memory, image sensors, foundry capabilities and advanced packaging technologies." The move appears aimed at internalizing robot technology by mobilizing not only DX capabilities but also Samsung Electronics' semiconductor strengths in the DS Division.
In the TV business, the company plans to develop Samsung TV Plus, which has surpassed 100 million monthly users, into a mega platform, while diversifying revenue through Samsung Gaming Hub, advertising services and OS licensing. The DA Division plans to make the heating, ventilation, and air conditioning (HVAC) business its next growth engine and expand into the central air conditioning market targeting global AI data centers and large industrial facilities.
[email protected] Jo Eun-hyo Reporter