The implied enterprise value of Samsung Electronics' Device eXperience (DX) division, which oversees smartphones and home appliances, has nearly halved over the past year. The division now represents less than 3% of Samsung's total corporate value, stoking concerns that the group's flagship consumer tech businesses are being overshadowed in the market.
According to sources in the financial investment industry on June 17, Mirae Asset Securities estimates the implied enterprise value (EV) of Samsung's DX division at 91.4 trillion won ($66.2 billion). By contrast, the company's Device Solutions (DS) semiconductor division carries an implied valuation of 3,353.6 trillion won. With Samsung's total target enterprise value pegged at 3,488 trillion won, the DX division's share has shrunk to just 2.6%.
This marks a stark reversal from August of last year, when Samsung's share price was in the 70,000-won range. At that time, the DX division accounted for 42% of the company's overall value, at 197.2 trillion won, compared with 240.5 trillion won for the DS division. In less than a year, the semiconductor business has expanded nearly fourteenfold in valuation, while the consumer tech division has seen more than 100 trillion won erased.
Analysts note that the decline in the DX division's value cannot be attributed solely to weaker smartphone and appliance sales. While the semiconductor arm surged, the finished goods business also contracted in absolute terms, with the bulk of the loss stemming from the Mobile eXperience (MX) smartphone unit. Mirae Asset Securities cut its valuation of the MX business to 80.3 trillion won, down from 184.1 trillion won last year, implying a drop of more than 100 trillion won. As a result, Samsung's smartphone business -- historically the group's primary cash cow -- has effectively been pushed to the sidelines. Ironically, as recently as last year, the memory chip business was valued at 174.4 trillion won, below the smartphone unit and at a 20% discount to rival SK hynix.
Samsung's television and home appliance operations face a similarly bleak assessment, especially compared with domestic competitor LG Electronics. Mirae Asset Securities values Samsung's Visual Display (VD) and Digital Appliances (DA) units combined at approximately 11.1 trillion won.
By comparison, LG Electronics' Home Appliance & Air Solution (H&A) division alone is worth around 16 trillion won, meaning Samsung's entire premium TV and appliance ecosystem is being valued at less than LG's single appliance division.
“Brokerages typically use a sum-of-the-parts (SOTP) valuation framework to highlight undervalued business units and lay the groundwork for a potential re-rating,” an investment banking industry insider said. “In Samsung's case, however, the SOTP analysis ironically reveals just how severely the DX division is being marginalized. The finished goods business is almost completely obscured by the enormous valuation of the semiconductor arm.”
Against this backdrop, Samsung Electronics launched its global strategic review meetings on June 16 to tackle the mounting crisis in the DX division. Executives are said to have acknowledged margin pressures stemming from rising memory chip prices and agreed on a dual-track response: accelerating the company's Artificial Intelligence Transformation (AX) and reshaping the business portfolio. With core operations spanning smartphones, TVs and home appliances all squeezed by surging component costs, the market is watching closely to see whether management's defense strategy for the second half of the year can halt the DX division's slide in valuation.
