Samsung Electronics (SSNLF, Financial), a leading South Korean tech giant, is significantly increasing its investment in artificial intelligence (AI) for consumer electronics. The company aims to enhance the connectivity of its diverse product range, from smartphones to home appliances like refrigerators and washing machines, to solidify its presence in the AI sector. Despite setbacks in high-end memory and generative AI markets, Samsung is leveraging its market position to integrate AI into its 500 million annual device sales.
Samsung's stock has fallen by a third in 2024, primarily due to its inability to compete effectively with SK Hynix in advanced memory sales for AI accelerators. Investor confidence was further shaken by delays in the approval of NVIDIA's (NVDA) high-bandwidth memory chips, although Samsung's smartphone division performed well this year.
The company showcased its smart home technology advantages at the CES in Las Vegas, highlighting its built-in home connectivity centers, unlike competitors Apple (AAPL), Amazon (AMZN), and Google's parent company Alphabet (GOOGL). Under CEO Han Jong-Hee's leadership, Samsung has integrated AI chips into home appliances like refrigerators, washing machines, and robotic vacuum cleaners, aiming to create unprecedented products.
Samsung also announced a new AI initiative for televisions to compete with Google's TV software, offering real-time translation and enhanced audio and video features. Leadership responsibilities are shared between Han Jong-Hee and Jeon Young-hyun, who will officially become co-CEO in March, focusing on the semiconductor business.
AI accounts for Samsung's largest R&D expenditure outside semiconductors, with plans for substantial investment increases. The SmartThings platform now connects 370 million users, growing 20% annually. Bixby, Samsung's voice assistant, will offer personalized experiences by recognizing family members. The company anticipates outperforming the consumer electronics industry's 3% growth projection, focusing on robotics, medical, and automotive technology for future growth.
