Samsung Bets on AI to Overhaul Business Structure

*Editor's Note: 'AI PRISM' (Personalized Report & Insight Summarizing Media) is an "AI-based personalized news recommendation and summary service" developed with support from the Korea Press Foundation. It selects and provides six customized news items by reader type.

1. Samsung Electronics' Global Strategy of 'AI Transformation'…All-Out Defense of DX Profitability

- Key Summary: At a global strategy meeting held on the 16th, Samsung Electronics gathered executives from major business divisions including Mobile eXperience (MX), Visual Display (VD), and Digital Appliances (DA), along with overseas subsidiary heads, to discuss second-half strategy, presenting AI transformation as a core direction. With the DX division's profitability deterioration becoming entrenched as expanding cost burdens combine with low-price offensives from Chinese companies, the company is concurrently shifting to a profit-centered business structure—halting TV and home appliance sales in mainland China, outsourcing or reducing low-value-added products, and reorganizing its portfolio around premium lines. Alongside this, the company also presented a goal of converting domestic and overseas production bases into "AI autonomous factories" by 2030, connecting everything from design to production and logistics with digital twins and AI agents. As a future growth axis, the company is promoting medtech (medical technology), expanding its stake in U.S. genetic analysis equipment company Element Biosciences to become its largest shareholder, accelerating investment in the digital healthcare sector.

2. U.S. Considers 'Priority Access' to Advanced AI for Europe…Lining Up Allies?

- Key Summary: The administration of U.S. President Donald Trump earlier on the 12th notified Anthropic of a directive to halt use of the AI models "Fable5" and "Mythos5" for all foreign nationals, citing national security. Subsequently, on the occasion of the G7 summit, U.S. Commerce Secretary Howard Lutnick is known to have discussed a "trusted partner" plan to grant priority access to the latest AI models only to core allies. In response, the EU—which currently relies on non-EU countries for more than 80% of core technologies and 70% of cloud computing—is showing moves to move away from the U.S., with France and others replacing Palantir systems with domestic corporate solutions or injecting an additional 655 million euros (about 1.15 trillion won) into developing homegrown AI. Meanwhile, some point out that excessive U.S. control measures could prove a failed strategy that hands a windfall to Chinese companies championing open-source AI models with their source code disclosure approach. CNBC observed that the episode imprints new risks on closed AI models and will further heighten global interest in open-source models.

3. Finding the Cause of Sales Slumps with AI Too…"Work That Took 2-3 Weeks, Handled in 15 Minutes"

- Key Summary: Palantir's AIP (Artificial Intelligence Platform), which Meritz Fire & Marine Insurance decided to adopt outright, is evaluated as a solution that maximized work productivity—global insurer AIG shortened its underwriting review period from two to three weeks to one day and raised its contract conclusion rate from 15% to 20%. Ontology, the core technology of Palantir AIP, integrates and manages data scattered across multiple systems into one, reduces setup time from more than half a year previously to within a few days, and is specialized in detecting fraud crimes across the financial industry, including insurance fraud, price manipulation, insider trading, and accounting fraud. Domestic insurance fraud detected last year amounted to 1.1571 trillion won, estimated to reach 9 trillion won annually including potential damage, and DB Insurance, iM Life, Samsung Life Insurance, and Samsung Fire & Marine Insurance are each moving to build AI-based incident analysis systems and fraud detection systems (FDS). However, selection as a target for the financial authorities' easing of network separation regulations is cited as a prerequisite for adopting Palantir AI, drawing attention to the authorities' decision.

4. LG Innotek (011070.KS) "Semiconductor Substrates, 1 Trillion Won Operating Profit Within 5 Years"

- Key Summary: At a Media Tech Day held at its Magok office in Gangseo-gu, Seoul, on the 16th, LG Innotek announced a mid-to-long-term management plan targeting 1 trillion won in operating profit for its package solutions business by 2031, by aggressively expanding its FC-BGA (Flip Chip Ball Grid Array, semiconductor substrate) business, a core component of AI data centers. Last year, the package solutions business posted revenue of 1.72 trillion won and operating profit of 128.9 billion won, surging 18% and 82% from a year earlier, respectively. The company plans to raise its market share through cooperation with U.S. Big Tech in a global market where Japan's Ibiden and Shinko Electric and Taiwan's Unimicron hold more than 70%. To this end, it confirmed a 1.6 trillion won investment to expand FC-BGA production at its plants in Gumi, North Gyeongsang Province, and Vietnam, and plans to begin full mass production next year of ultra-large-area 120mm FC-BGA, twice the area of the current industry-standard 85mm. Jo Ji-tae, executive vice president and head of LG Innotek's package solutions business division, said the company will gradually enter the high-end substrate market for autonomous driving and AI semiconductors by 2028.

5. Cho Hyun-joon "Data Is the Oil of the 21st Century…Concentrating Group Capabilities on AI DC"

- Key Summary: About nine years after Hyosung (004800.KS) Chairman Cho Hyun-joon formed a data center task force (TF) in 2017, a joint venture between Hyosung Heavy Industries (298040.KS) and Singapore-based data center operator STT GDC opened "STT Seoul 1," a hyperscale data center with up to 30 MW (megawatts) of capacity, in Gasan-dong, Geumcheon-gu, Seoul. The data center combines Hyosung Heavy Industries' power solutions such as ultra-high-voltage transformers and circuit breakers with STT GDC's design and operation experience. Unlike the trend of large data centers dispersing to the outskirts of the capital region due to regulatory and power supply chain constraints, it is located in the city center, securing locational competitiveness that minimizes data transmission latency with major business hubs such as Gangnam and Yeouido. Chairman Cho said, "I was convinced data would become the oil of the 21st century," and, looking ahead to an era in which AI competitiveness is national competitiveness, expressed his intent to grow the data center business as Hyosung's new growth engine. All Hyosung affiliates are establishing a differentiated business model concentrating power, construction, and IT capabilities on AI data centers under Chairman Cho's special directive.

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