Just now, Samsung Electronics announced its withdrawal from the home appliance market in China. An official statement read, "In response to the rapidly changing market environment, and after careful consideration, Samsung Electronics has decided to cease the sale of all home appliances, including televisions and monitors, in the Chinese mainland market."
On the same day, Samsung Electronics' market capitalization surpassed US$1 trillion, making it the second Asian company, after TSMC, to join the trillion-dollar club.
Looking at these two events together is particularly striking.
All the home appliance categories that once established Samsung's premium brand perception among Chinese consumers are now exiting. As early as 1992, Samsung Electronics entered the Chinese market, investing in and building factories in Huizhou, Tianjin, Dongguan, and elsewhere, launching its manufacturing operations in China. Thirty-four years later, Samsung's home appliance business is leaving China, a manifestation of highly rational capital logic. When a company's stock price and market capitalization are driven primarily by its memory chip business, low-margin, high-intensity home appliances become an unprofitable burden on the financial statements.
In 2026, Samsung (the world's largest memory chip maker) sees its memory chip business as one of the most profitable industries globally. HBM (High Bandwidth Memory) is in short supply, with Nvidia's GPU orders booked through 2027, and Samsung has captured the lion's share of this AI infrastructure boom.
Looking at the financials: In the first quarter of 2026, Samsung Electronics reported sales of 133 trillion Korean won, with operating profit up 755% year-over-year. The chip business contributed nearly 90% of that profit in the quarter, while the home appliance business remained in the red over the same period, losing about 600 billion won in the previous quarter. Although losses narrowed this quarter, the business is still hovering near break-even.
The gross margin for home appliances has long lingered between single digits and around 10-20%. The profit from selling one television may be less than a fraction of the profit from a single memory chip. Moreover, the chip business requires no after-sales service team, no deep distribution channel penetration, and no price wars with local brands.
When Samsung holds onto the world's most profitable semiconductor business, fighting tooth and nail in the home appliance market is simply choosing unnecessary hardship. Those making AI-powered appliances, building large language models, or developing AI agents are all gold prospectors; selling the shovels is the surefire path to profit. As appliance makers go all-in on AI, they have to buy Samsung's memory chips, effectively paying Samsung a "computing infrastructure tax" one way or another.
Moreover, Samsung's presence in China's home appliance market had become so thin that even its withdrawal barely causes a ripple. Data shows that Samsung's offline market share for color TVs in China had fallen to just 3.62% by April of this year, and its shares for refrigerators and washing machines were even lower, at 0.41% and 0.38%, respectively.
Samsung's current situation closely resembles that of DuPont in the late 19th century. DuPont started with black powder, but when the underlying scientific paradigm of the chemical industry shifted, DuPont quickly transformed itself into a materials science company, providing downstream industries with nylon, Teflon, and Kevlar, inventions that defined 20th-century industrial civilization.
DuPont does not produce bullets or shells, but all arms makers rely on its raw materials.
Samsung follows the same logic. It no longer needs to engage in direct, head-to-head competition with Chinese brands in televisions and refrigerators. Instead, it can supply memory chips or OLED panels—a more advanced form of market control. People might think it has withdrawn, but in fact, it has moved down to a more fundamental layer of the industrial chain.
That said, who would refuse if a company can make more money? Samsung's withdrawal from China's home appliance market is still fundamental because it cannot outcompete Chinese brands on their own turf.
On the surface, the reason appears to be premium pricing. For example, in televisions, TCL launched a mass-market MiniLED product in 2021, bringing a technology once confined to high-end showrooms directly to ordinary consumers. Samsung only began large-scale promotion in 2022, pricing its models above 15,000 yuan. While TCL and others were making the technology accessible, Samsung was still telling consumers, "Our MiniLED is worth 15,000 yuan."
And on the core dimension of AI-powered appliances, Samsung's component advantages have not translated into competitiveness in end products. At this year's AWE, Haier unveiled its AI Vision 2.0 system, which has already been mass-produced and integrated into product lines including refrigerators, washing machines, and air conditioners. For instance, an AI refrigerator can recognize ingredients, automatically detect storage status, and recommend recipes, truly embedding AI capabilities into the everyday act of opening the fridge.
Last year, Midea launched the world's first DeepSeek-enabled air conditioner. This year at AWE, it showcased AI agent appliances that can sense, make decisions, and act autonomously like "lobsters" (OpenClaw-typed agents), along with home robots and whole-home air systems. As for televisions, a former stronghold of Japanese and Korean manufacturers, Chinese companies are now seizing market share. TCL has made MiniLED a mainstream technology, and Hisense has aggressively promoted RGB-MiniLED, which outperforms traditional solutions in color reproduction.
In contrast, the AI appliances or MicroLED TVs Samsung demonstrated during the same period remain at the prototype stage. Mass-produced MicroLED TVs like the R95H and R85H have yet to be seen in the Chinese market.
Samsung's pace has fallen behind by more than one cycle.
Withdrawing from the Chinese market will not make Samsung's home appliance business better off. Home appliances are an industry that relies on economies of scale. Without the volume supported by the Chinese market, the cost of mass-producing many new technologies simply cannot be reduced, creating a negative cycle: the less market share a company has, the less willing it is to aggressively launch new products; the more conservative it becomes, the more its market share shrinks.
Even more critically, the appliance business is losing its independence in the AI era. At exhibitions like AWE, CES, and IFA, as well as at product launches of major Chinese appliance makers, we constantly hear the concept of "human-car-home." Within this narrative framework, appliance manufacturers must own or partner with automotive and robotics businesses to build a complete, closed-loop user experience.
It is not that Samsung lacks AI or a smart-home ecosystem. Globally, Samsung has the SmartThings platform, Galaxy phones, Harman's automotive business, and even AI products like the Ballie home robot. But the problem is that this ecosystem has never truly been established in China.
Is it because Samsung lacks capability? Not exactly. It is a matter of will and organizational structure. Samsung is a highly centralized Korean chaebol, and its China operations lack sufficient product-definition authority. All localization efforts amount to "compliance adaptation" within the headquarters' framework, rather than genuine "re-engineering for this market."
This is fundamentally different from the logic of Haier, Midea, TCL, Hisense, and others, which are more agile and have all achieved "Glocal" (Global + Local) R&D to better serve local markets. Samsung, by contrast, takes global products and "translates" them for China. In a market where iteration speeds are accelerating and user needs are increasingly localized, the cost of that translation grows ever larger. As a result, Samsung has never been able to stitch together the "human-car-home" landscape in China.
The world has changed. Home appliances are no longer a competition of standalone products but a battle for ecosystems. Samsung lacks the infrastructure for this, so withdrawing from the appliance market essentially means leaving the table.
The more immediate reality is that the intensity of competition in China's home appliance market is so "brutal" that it has left many international brands gasping for air.
Established giants like Haier, Midea, Hisense, TCL, Changhong, and Skyworth have built deep moats and high walls with their technology, product strength, omni-channel reach (online and offline), supply chains, and brand recognition. At the same time, new players are constantly entering the fray.
Yu Hao, founder and CEO of Dreame, may sound arrogant when he says he wants to build a hundred-trillion-dollar market-cap company. Still, his brand has taken the first tough bite out of the home appliances market after moving beyond "smart cleaning." Founded in 2017, Dreame employs a strategy of "democratizing high-end features," packing the suction power and cleaning performance once unique to reowned brand Dyson into more affordably priced products.
According to statistics, Dreame's revenue for the first three quarters of 2025 reached 12.07 billion RMB, a year-on-year increase of 72.2%. Its global market share for robot vacuums stands at 12.4%, ranking first in 22 countries and regions. Even in the UK, Dyson's home turf, and in EU markets, Dreame's wet-dry vacuums rank first in multiple areas.
Then there is Xiaomi, a "price butcher" whose every product pulls down industry profit margins by another notch. Even companies like Pop Mart, seemingly unrelated, have started producing Labubu-themed refrigerators.
It is hard to imagine how Samsung could compete with all these rivals. Being unable to keep up is simply a reality.
There is nothing new under the sun. Before 2016, Samsung's smartphone market share in China's high-end segment could go head-to-head with Apple. After the Note 7 battery fires, Samsung's mobile business in China went into free fall. Everyone thought losing Samsung phones would be a huge loss for the Chinese market, but the opposite happened: Huawei, Oppo, Vivo, Xiaomi, and Honor quickly filled the vacuum from high-end to low-end Android devices. The Chinese market even gave rise to the HarmonyOS ecosystem, which now rivals Android and iOS, and is the most aggressive wave of foldable screen innovation.
The home appliance market will likely follow the same script. With Samsung TVs absent from Chinese living rooms, TCL MiniLED and Hisense MicroLED will continue to push boundaries. Haier and Midea will extend the frontiers of AI-powered appliances even further.
Before Samsung, the Japanese camp had already folded. Sony and Panasonic have respectively packaged their global TV businesses under TCL and Skyworth. Toshiba sold its appliance business to Midea in 2016 and its TV business to Hisense. From the German camp, Bosch and Siemens have virtually lost relevance in terms of product update speed and price competitiveness. These once-unassailable global appliance giants are all crumbling in head-on competition with Chinese brands, either retreating to niche strongholds or exiting the stage entirely.
Samsung's withdrawal is merely one wave in this decade-long tide of brand migration in home appliances. It may appear sudden, but it is inevitable.
(Source: Leikeji)
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