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Samsung makes AI core of global strategy to defend device profitability
Samsung is embedding generative AI into workflows to protect device division margins from price wars. It plans to transition to autonomous factories by 2030.
Samsung Electronics is placing an artificial intelligence overhaul at the center of its second-half management strategy, betting that a fundamental redesign of work methods and manufacturing can protect profitability in its finished-products division. The plan, reviewed this week at the company's Global Strategy Council, comes as the Device eXperience (DX) unit - covering smartphones, TVs, and home appliances - faces mounting cost burdens and a price war with Chinese competitors.
The council, which opened June 16, brought together executives from Mobile eXperience, Visual Display, Digital Appliances, and Device Solutions, along with heads of overseas subsidiaries. While the semiconductor division continues to benefit from rising memory chip prices, the DX division's margin structure has weakened. Management concluded that the finished-products business is under compound pressure and requires a structural response.
AI as the operating system for decision-making
The company will introduce external generative AI tools such as ChatGPT, Gemini, and Claude into its internal work systems. The goal is to shift from a people-centered work structure to a data-based automated decision-making model. Samsung said it will expand AI use across production, planning, and development, aiming to raise both decision-making speed and organizational execution capability.
This approach reflects a broader AI for Executives & Strategy shift in which leadership teams treat AI not as a point solution but as the backbone of operational design. The council framed the transition as an "AX" (AI transformation) initiative, embedding intelligence into workflows that have historically relied on human judgment and manual coordination.
Restructuring global operations around profit
Samsung is pulling back from unprofitable markets and product lines. It recently decided to stop selling TVs and home appliances in mainland China, where price competition had eroded margins. The company is also outsourcing or scaling down production of low-value-added goods while concentrating its portfolio on premium lines.
These moves signal a deliberate pivot from volume to value. The TV and home appliance businesses are shifting their center of gravity toward software and services. The recent change in leadership of the Visual Display division is seen as part of this transition, as Samsung attempts to extend its hardware strength into platform, content, and service domains.
New growth axes: medtech and autonomous factories
Samsung is accelerating investment in digital healthcare as a future growth engine. It expanded its stake in U.S. gene analysis equipment company Element Biosciences to become the largest shareholder, aiming to combine AI-based medical data analysis with diagnostic technology.
On the manufacturing side, the company presented the transition to AI autonomous factories as a key task. The plan is to reorganize domestic and overseas production bases around AI by 2030, linking design, production, and logistics through digital twins and AI agents. High-performance computing infrastructure to support this has already been built and is fully operational.
Why this matters for Executives and Strategy
Samsung's moves illustrate a pattern that strategy leaders across industries will recognize: when a legacy hardware business faces margin compression, the response is not simply cost-cutting but a structural rewiring of how work gets done. The decision to embed generative AI into the core operating rhythm - from planning to production - is a bet that speed and data-driven decisions can become a durable competitive advantage. For executives managing multi-division portfolios, Samsung's approach shows how AI can serve as both a defensive tool for profitability and an offensive platform for entering adjacent markets like medtech. The message from the Global Strategy Council is that AI transformation is no longer an R&D experiment; it is the central mechanism for protecting and reshaping a global business.