Samsung Electronics is developing strategies to sustain strong performance in response to growing demand for artificial intelligence (AI). The unexpected variable of a peace agreement between the U.S. and Iran is prompting the company to revise its management scenarios, originally prepared for the prolonged risks in the Middle East.
According to industry sources, Samsung is holding its Global Strategy Meeting for the Device Experience (DX) division from June 16 to 18. The meeting for the Device Solutions (DS) division, which oversees semiconductors, will take place on June 18. This annual meeting gathers key executives and overseas branch leaders to review business goals and regional sales strategies.
This year's meeting is influenced by the situation in the Middle East. Initially, Samsung planned to address risks such as logistics disruptions, rising raw material prices, and weakened consumer sentiment due to the ongoing conflict in the region. However, expectations for the normalization of shipping through the Strait of Hormuz following the peace agreement could reduce energy and logistics costs.
The DX division's main agenda focuses on recovering profitability and expanding sales. Demand for smartphones, TVs, and home appliances is sensitive to changes in the Middle East, Europe, and emerging markets. If the sales network and logistics routes in the Middle East return to normal, promotional strategies for the second half of the year may also change. A decrease in raw material and shipping costs could provide more flexibility in pricing and inventory management.
The Mobile Experience (MX) division is expected to discuss strategies for premium smartphones and the expansion of Galaxy AI. Meanwhile, the TV and home appliance sectors face challenges in defending profitability amid weak demand. Although the normalization of the Middle East market and reduced logistics costs are positive developments, the pace of global consumer recovery remains uncertain.
The DS division's key focus will be on responding to AI semiconductor demand and strategies for foundry recovery. With strong demand for high-bandwidth memory (HBM), server DRAM, and enterprise SSDs, the division is expected to review its supply strategies for high-value memory and production capacity management. The easing of risks in the Middle East is also seen as a positive factor for semiconductor equipment and material procurement.
The foundry business will also be a major topic. Samsung needs to improve yield rates for advanced processes and secure new customers. With expectations for a return to profitability in the second half of the year, expanding orders and establishing a stable mass production system will likely be focal points of the meeting.
However, it may be premature to overly reflect the effects of the peace agreement. Even if oil and shipping costs stabilize, it may take time to adjust waiting ships, insurance rates, and normalize supply chains. Samsung must navigate the opportunities presented by reduced risks in the Middle East and increased AI demand while simultaneously assessing regional sales networks and material and component procurement.
Additionally, the potential establishment of a semiconductor factory in Honam is expected to be a significant issue. Ahead of the regular meeting of Samsung's Compliance Committee, Chairman Lee Chan-hee emphasized the need to consider both the company's role as a national enterprise and its sustainability. While there is growing demand for balanced regional development, the investment in semiconductor factories requires comprehensive management decisions that take into account power, water, workforce, and supplier ecosystems.
* This article has been translated by AI.
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