Samsung Electronics banks on AI to outpace global growth in smartphones, home appliances

Samsung Electronics plans to strengthen its AI business in the device, with the aim of surpassing the global market growth in the consumer electronics segment this year.

The global consumer electronics market for smartphones, TVs and home appliances will grow by about 3% in 2025, Jong-Hee Han, CEO of Samsung Electronics, told CNBC’s Chery Kang.

Samsung, the world’s largest smartphone and TV maker, expects its mobile device business to grow 4% to 5% this year, while growth in the TV and home appliance units is also likely to accelerate, said Han, also the head of the device eExperience ( DX) division of Samsung Electronics.

Samsung Electronics has stepped up efforts to connect their devices to artificial intelligenceinstalling AI chips in their refrigerators, washing machines and robot vacuum cleaners.

It has also enhanced its AI features on its flagship premium smartphone models, such as the Galaxy S24 series, which has many AI-enabled features including real-time translation of some phone calls in a foreign language.

This comes as Chinese brands like Huawei and Xiaomi have emerged as serious competitors to Samsung offering high-end smartphones at significantly lower prices.

Competition from Chinese companies is “beneficial” for Samsung and consumers, Han said during the interview, noting that the company aims to differentiate its products with more safety and convenience, rather than lowering prices.

Samsung announced a great handover of leadership in Novemberputting Jun Young-hyun as co-CEO and head of the memory chip arm, sharing leadership duties with Han.

The South Korean tech giant, once the dominant force in the memory chip sector, has fallen behind SK Hynix in the race to supply high-bandwidth memory chips, or HBM chips, which are a key component for the leader of AI Nvidia.

Samsung said it will issue its fourth quarter revenue and operating profit forecasts on Wednesday, before releasing quarterly results in late January.

Samsung’s operating profit for the December quarter is expected to come to 8.2 trillion won ($5.6 billion)according to Reuters estimates, a notable increase from 2.8 trillion won said a year earlier, but from 9.18 trillion won in the previous quarter.

In October, June, the head of the semiconductor division, issued a rare apology for the company’s disappointment third quarter performance.

Last year, shares of the South Korean giant tumbled 32%, according to LSEG data, lagging the 9.6% loss of the broader Kospi benchmark.

The stock price “has never been this low before,” Han said during the interview, adding that the company has a “valorization” plan, aimed at increasing shareholder returns. The plan will be announced “one by one when it’s in order,” he said, according to a CNBC translation of his statement in Korean.

Investors hope that Samsung closes the gap on HBM and becomes more serious about its “valorization” scheme, Phillip Wool, head of research at Rayliant Global Advisors said in a note on Monday, while adding that the 10 trillion of recovery of shares won. Plan can help to stabilize the price of shares.

The company unveiled a surprise plan in November to buy back about 10 trillion twenty shares in the following 12 months.

Peter Lee, an analyst at Citi, warned in a note on December 31 that a longer-than-expected delay in getting Nvidia’s approval for its HBM chips and weaker PC sales could continue to pose negative risks. He maintains a “buy” rating on the stock while trimming his price target to 83,000 won from 87,000 won.