Samsung (005930.KS) announced its flagship smartphone line for 2025, the Galaxy S25 series today.  While the event detailed a number of hardware improvements, the real focus was on (not surprisingly) AI.  It seems that while Samsung continues to upgrade hardware to maintain a competitive stance against Chinese smartphone brands, we believe they understand that the incremental hardware improvements made each year are not enough to stimulate consumer to upgrade unless their phone begins to age out.  Foldables represent a new mobile category but due to their high price, volumes are relatively low, so it is essential that major brands maintain a flagship line to offset mid-range, lower margin lines.
There are times when hardware improvements can be a driver for consumers, as were OLED displays when they were new to the mobile world, and multiple cameras back a few years ago. But at this juncture, even OLED displays cannot be much larger and there is no new display technology on the near-term horizon that is appreciably different from what is available today.  Higher resolution cameras will always be possible as semiconductor technology improves, as will chipsets, CPUs, and GPUs, but other than foldables, mobile phone hardware will improve slowly and slowly does not excite consumers.
Smartphone software is in a similar position.  Smartphone applications have changed little over the past few years and do almost nothing to convince consumers to upgrade their mobile devices, but Ai for mobile devices is developing quickly and represents a platform where smartphone brands can compete and attract attention.  Ai does need processing power but Qualcomm (QCOM), Mediatek (2454.TT), Apple (AAPL), Google (GOOG), and Samsung continue to adapt their chipsets to the needs of AI, and while in the true sense, AI is a hardware-based system, on a mobile device it appears to consumers as software and requires relatively little hardware or mechanical changes or design restrictions.  However AI represents change and change in the CE market is something every marketing department looks toward to sell more devices.
Samsung seems to understand the fact that there are two AI’s.  One, answers your questions and interacts directly with users, while the other works silently in the background.  But they also seem to understand that the two should be working together and if there was anything to be taken away from the Samsung S25 event, it was that Samsung is interested in merging those two AI processes.  This not only improves the user’s experience with the phone but lessens the need for breakthrough hardware or software application improvement to attract consumers.  By leveraging Ai to allow applications on the phone to work together, the applications seem to be improved, even if they are not, and the ability of the AI to control or direct applications without the user having to open an application for each task is an improvement worth buying a new phone for.
Samsung’s multi-modal Ai allows the user to speak to the Ai directly (voice or even audio) and gives the AI the ability to create ‘agents’ that perform tasks that the user would typically have to do by pausing what they are doing to open a separate application.  Here’s an example.  The user is listening to a conference call which happens to be in Korean.  The Ai translates the call in real time but also compiles a transcript of the call.  When the call is finished the user tells the AI to summarize the call and reviews the AI summary.  The user tells the AI to change the 3rd paragraph to be more concise and reviews the change.  The user then tells the Ai to write a cover letter describing the circumstances of the call and to send the cover letter and the transcript summary to those in the ‘Level 2 Client’ list. 
Rather than having to open a number of applications to complete each part of the full task, the user either read or listened to the AI during each step and opened no applications.  The AI interfaced with the necessary applications and completed each task.  The system also gives the option to allow the Ai to collect information from other applications and devices in the Samsung ecosystem that can help it build a detailed profile of the user in order to make better or more personalized suggestions.
This can only happen when the AI is integrated into applications and Samsung has the advantage of having a recognizable enough brand that users are willing to use Samsung applications on its phones, along with a variety of externally developed applications.  Samsung offers external developers a number of tools to give them access to Samsung’s One UI 7, the user interface that sits on top of Android and provides the hooks to the AI, but there is nothing better than having that interface and the applications themselves developed in-house.  Only Samsung, Apple, and Google have the ability to tie their hardware and AI to such large application bases, with both Apple and Samsung concentrating on processing AI on device whenever possible.
As noted Samsung said all the right things about its AI at the Galaxy S25 event but everyday use can be much different from well produced event videos.  The Galaxy S25 family is now on pre-order and will be available in stores on February 7, at which point we should be able to get a better idea as to whether the phones live up to their marketing pitch.  The good news is that if they do, there is no premium being charged for the AI capabilities as the phones are priced the same as last year’s models, a plus for consumers.  Below we show only the differences between the hardware in the Galaxy S25 and last year’s Galaxy S24.

⁎ The 4th main camera (ultrawide) in the S25 Ultra is 50 MP f/1.9 while the 4th mani camera in the S24 is 12MP f/2.2.  The other three cameras are the same.
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​IDC is out with early predictions for the semiconductor market for 2025, expecting a 16% increase in value this year to $779.8b.  Inside of that number are expectations for 24% growth in the memory market, with DRAM expected to be up 30.2% to $118b, with HBM (High Bandwidth Memory) for AI the driver.  As a contrast, they predict that the smartphone market will grow only 3.3% this year, primarily in 2H as inventory levels are worked down, but the datacenter market will see 23.9% growth, with that jumping to 33.6% if you include the cloud and enterprise markets.
As we have noted previously, Samsung, the leader in the memory market, has been unable to capitalize on that leadership and has been losing ground to competitors, SK Hynix (000660.KS) and Micron (MU) in this very competitive market.  Samsung has had problems with heat and power consumption in its HBM3e 8 and 12-layer products that caused yield issues and qualification delays at Nvidia (NVDA), contributing to the recent weakness, and among the pressures that have lead to Samsung’s recent executive level parings.  The head of Samsung’s memory group made a public apology for the shortfall in 4Q’24, leading one to believe that even more intense pressure continues for Samsung to right the problems in the semiconductor division, and it seems they are taking additional steps toward other issues that might be contributing to the problems with the company’s semiconductor production.
Samsung has been developing a more advanced memory product (D1b) that is based on a 10nm node.  They have been producing D1b memory, which is used in its DDR5 memory products, on a 12nm node since late 2024, which itself was delayed by almost a year.  This node change has raised expectations  about the 10nm product, based on higher density and even higher speeds than the D1b 12nm product.  However it seems that as it continued the development of the 10nm product, Samsung has taken the very unusual step of changing the design of the D1b 12nm product, which has been in production for nearly a year, to improve yield.  This typically means that the production process is also changed, an expensive procedure, with equipment having been ordered in 4Q ’24 (unconfirmed) and production of the D1b memory with the new design scheduled for 2Q or 3Q this year.
This was not a light decision on Samsung’s part, likely based on the need to push ahead of SK Hynix and Micron, both of whom use D1b memory in their HBM product, while Samsung is still using D1a memory in its HBM.  If Samsung is able to meet it goal of producing the new design of D1b memory quickly, without yield issues, they will remain competitive until the D1b 10nm development is completed.  If they face problems with the new design and process, they could lose more ground to their competitors and the idea of a design change mid-stream will be viewed as a mistake.  It’s a big bet, but also indicates the urgency being placed on fixing Samsung’s memory issues and allowing them to capitalize on the strength of the memory business this year, an absolute necessity if they are to remain the leader in the memory space.

​Large TV sets bring visuals closer to life size and therefore make them more realistic, and, as LCD display manufacturing matures, the ability of producers to increase screen size continues to grow.  While the average screen size across the broad spectrum of TV sets is only a bit above 50”, LCD panel manufacturing has advanced quite significantly from the mid-1980’s when 9” – 10” LCD TV screens were the standard and 30” demos were the talk of the industry.  We have now reached a point where consumer TV sets are almost life-size, with the largest LCD (Mini-LED/Quantum Dot) TV being 115” on the diagonal[1] , the TCL (000100.CH) 115X955.  This 216 lb. behemoth stands 56.4” high, 101” wide and 2.2” thick, with a screen area of 5,651 in2, enough room to fit 345 iPhone 16’s or four 55” TVs within its confines, with a little room left over.  In human terms, the set’s height is roughly that of a 10-year-old child.
Unfortunately, the production of such a large display is extremely inefficient, utilizing only 62% of a Gen 8.6 substrate and 41% of a Gen 10 substrate, although multi-modal fabs, those that are able to cut more than one size panel per sheet, would be more efficient. Yield is also a big issue, as the sunk cost of a defective panel of this size, even at an early stage in the production process, is extremely high.  That said, this TV set has 20,736 zones in its backlight, allowing precise backlight control for every 0.27 in2 of screen area, along with all the bells and whistles that one would expect in a high-end TV.
This all comes at the exceptionally low price of only $20,000 (or 24 easy payments of $833.34 if you make the purchase with your new Best Buy (BBY)/Visa (V) credit card), unless you are one of those who only wants the latest technology.  In that case there is the Samsung (005930.KS) 114” Micro-LED TV, but that will set you back a mere $150,000 (those 24 easy payments will now be $6,250 each), although both sets are 2024 models if that matters to you.  The real issue here is that if you are willing to accept a slightly smaller TV set size (98” to 100”) and a direct lit (No Mini-LED but with Quantum Dots) backlight, you can grab the Hisense (600060.CH) (100QD7N) 100” TV for $2,000, and if you are willing to go down to 98”, you can save another $200 with the TCL 98Q651G for $1,800.  
So while there is still a very big premium for the top of the TV set size triangle, the fact that the competition between the four LCD panel producers that are currently producing LCD panels 98” or larger is extremely intense, as is the competition between TV set brands for high-end customers, causing the price of these very large TVs to continue to decline.  If one times their purchase around Black Friday or after new model announcements, you too can be the talk of the neighborhood.  Your kids will be popular, you will have friends dropping by every time there is a big game, and only a few of the old-timers will say, “Ah, who needs it?  We had a 10” set in the 50s and we loved it!”


[1] There are larger modular Micro-LED sets but they tend to be custom built.

​Samsung Electronics (005930.KS) relies on its DS division (Semiconductors) to generate operating margins that offset the lower (10% or less) margins of its DX division (Phones, Networks, TVs), despite the fact that DX generates ~60% of the company’s sales, against DS’s 37% to 43% of sales.  When the DS division is operating correctly, as it did for most of 2022, it can generate ~30% of company sales but with an operating margin between 22% and 35%.  Unfortunately, the semiconductor business has not been nearly as good for Samsung as it has been for those not as highly focused on the memory market, and based on Samsung’s just released guidance for 4Q, things actually got worse rather than better in 4Q.
Samsung guided the 4th quarter to 75 trillion won ($51.4b US), down 5.1% q/q but up 10.7% y/y.  This is 3.2% below consensus.  Operating profit guidance was worse at 6.5 trillion won ($4.5b US), down 29.2% q/q but still up 130.5% y/y, pointing out how bad things were a year ago.  Operating margin will come in at ~8.7%, against 11.6% last quarter and 4.2% a year ago, but the guidance for operating income was 27.5% below consensus.  Samsung does not give detail as to the divisional breakdown until its call later this month, but it is thought that the delay in getting its High Bandwidth Memory (HBM3E) qualified at Nvidia (NVDA) as the reason, although we, as did others, thought that the semi division would have done a bit better, even with the delay.  Not a good start for 4Q in the CE space.
That said, LG Electronics also gave 4Q guidance, and while sales were 22.78 trillion won ($15.6b US) which is fractionally up q/q and in line with consensus, operating profit, at 146.1 billion won ($100.4m US), far lower than the consensus of 447.9 billion won ($307.2m US) and over 50% lower than last year’s 4Q.  LG also does not give details but did indicate that the rise in shipping costs and one-time costs associated with the company’s treasury stock retirement program, along with global economic uncertainties, all contributed to the shortfall.  On the positive side LG’s home appliance segment was the biggest contributor to sales and operating profit.

​Recently we noted that Samsung (005930.KS) was one of the only major CE manufacturer that does not offer Dolby (DLB) Vision™ across its TV line, instead developing its own HDR 10+ high-definition video format in conjunction with 20th Century Fox (DID) and Warner (WBD).   These systems increase image brightness and contrast relative to SDR (Standard Definition), along with increasing the color palette, and adjust image parameters on a frame-by-frame basis, rather than fixing a group of settings for the entire content duration, as is the case in SDR.  What makes the Samsung and Dolby systems different is that Dolby Vision has to be licensed by the content creator (typically a one-time fee) and by the device manufacturer (typically a per unit fee), while the Samsung system is open source and therefore free to use.
It seems that Samsung is taking this concept further and has just announced that it will be including Eclipsa™, its open-source spatial audio system, across its entire TV line in 2025.  This system is in direct competition to Dolby’s Atmos™ spatial audio system and similar ones from DTS (DTSI), Sony (SNE) and others, including Apple (AAPL), although Apple’s Spatial Audio is primarily used in its own products as it is closely tied to the OS. 
These audio formats are object oriented, meaning that they isolate each sound, whether it is a voice, music, thunder, gunshot, etc. and allow it to be placed in a three-dimensional space, as opposed to the left/right two-dimensional space used in stereo recordings.  By adding the dimensions of ‘height’ and depth to the audio, a more realistic portrayal of the sounds can be created.  In a typical stereo (2 channel) playback system the sounds are placed horizontally between a left and a right speaker at the time of mixing, or can be mixed in a  ‘surround’ format, typically adding a set of rear left and right channels.  Systems such as Atmos or Eclipsa take that information and make each sound into an object by sampling the audio 48,000 times each second and breaking the audio into objects rather than forcing them into two or four channels.  The systems can then place each object anywhere left/right, front/back, and above/below, creating a more realistic 3-dimensional playback that more closely matches the screen.
These systems typically use speaker systems that include the usual left and right front (and a center speaker as most dialogue originates from center stage), a pair (L & R) of rear speakers, and a height speaker, but they also have to be able to be used on generic stereo systems, such as the TVs own two speakers or headphones. In order to do this, these systems use a number of tricks to fool the human brain.  Delaying (Milliseconds) some objects in one speaker can make it seem like it is further ‘back’ on one side than the other and reducing the volume of an object can have a similar effect, while filtering (changing the tone) of an object can seem to move its location, but the full effect of object-oriented audio is found on the type of speaker set-up described above.
Samsung’s Eclipsa system is an outgrowth of IAMF (Immersive Audio Model & Formats), an audio format it has been developing with Google (GOOG) since 2020 to improve on the ability of other object-oriented audio systems, particularly when used on 2 speaker systems.  At least that is the stated objective, but the fact that Dolby (and others) charge a license fee to use their systems seems to be a big factor, with Samsung unwilling to pay to license such systems when it believes it can produce its own. 
However, while 3D audio market statistics are few and far between, we believe Dolby has had the dominant share and the only way a new competitor can make any headway in said market would be with an open source, and therefore free offering, which is the route Samsung has taken.  Of course Samsung will offer the system across its own TV set lines but will have to convince other CE brands that it can do at least what Atmos can do, without the fees.  Industry organizations, particularly the Alliance for Open Media, have been advocating for royalty free codecs for almost 10 years but has focused primarily on video codecs so Samsung and Google, both AOM Steering Committee members, must get the ball rolling. 
Should their members get behind the Samsung/Google IAMF framework, it would stand as a direct competitor to Dolby Atmos, and since the Alliance for Open Media has participated in the development of IAMF, there is such a possibility.  That said, we note that it is ultimately up to content creators to decide what format they  wish to use, so it will take more than sponsorship from the AOM steering committee members or rank-and file supporters before real adoption is afforded to the new system, but the good news is that it is free, making it available to hardware and software manufacturers, who will not have to pay to build encoders and for CE brands to build decoders into their products, as Samsung is doing.  Its hard to battle an incumbent as entrenched as Dolby, but ‘free’ usually helps.

​While not officially confirmed by the South Korean government, it has been said that the US has granted Samsung Electronics (005930.KS) and SK Hynix (000660.KS) a one-year extension to the US export rules on semiconductor equipment that were put into effect last October.  The rule, which would have tacitly included fabs situated in China but owned and run by both South Korean companies, would have prevented both from expanding or upgrading existing facilities, making them non-competitive with Japanese, Taiwanese, and other Chinese fabs that might find local sources for certain equipment.  We expect official announcements will be made once the current grace period ends at the end of September.

Write this down, 98Q80C.  It is the model number of Samsung’s (005930.KS) ‘almost’ released 98” Mini-LED/Quantum Dot 4K TV.  This monster (~4’ high x 7’ wide – you can fit a bit over three 55” TVs in that space!) includes all sorts of technology to enhance the picture regardless of what you might be watching and has sound object tracking that places sounds where they were positioned in the image, using Dolby (DLB) Atmos (hopefully you have the front, left, right, center, and to overhead speakers that Dolby requires).  But what really makes the 98Q80C unusual is the price.
When the 1st Samsung 98” Mini-LED/QD 8K set came out, it sold (in Korea) for $58,450 and the 4K equivalent sold for $35,160.  Last year the 98” 4K set sold (US) for $15,000, but this year, at least for the next 2 days and 18 hours, you can pick up this 28.5 ft2 baby for a mere $7,999…but wait, there’s more!  If you beat the deadline (pre-orders), Samsung will take off $1,000, bringing the price down to $6,999, and if you place the order at one of Samsung’s participating retailers, such as Best Buy (BBY), they will take another $500 off.  Along with the discounts, you get (hurry, only 2 days left!) a free, yes free, Q800C Soundbar ($1,000 value according to Samsung), free, yes free, installation ($120 value), and 0% financing with $0 down, plus Samsung’s Care+ extended coverage (value of $249.99 for this set for 1 year).
But seriously folks, Samsung is pushing this set, at least for the next 2 days, to build its presence in the 80+” TV market, which is expected to grow 24% this year, despite weak overall TV shipments and sales.  Samsung has the #1 position in this ultra-large market (40%+), and while the 80+” market is small in terms of unit volume (~2.8m units this year), the sales dollars and margins make it quite lucrative, even with the perks above.  We are not saying to dip into the kids’ education funds or take out payday loans, but if you were thinking about filling your living room wall with a 98” TV, strike while the iron is hot, the clock is ticking!
►Don’t forget that our TV pricing data suggests that while there might be price peaks and valleys for every TV set, the general trend is down as the number of days from release increases.  If you need it now, take advantage of this early discount.  If you are not in a hurry, new model pricing is typically the highest over the life of the Tv model.

Legal Mumbo-Jumbo - Note: We have absolutely no vested interest in Samsung or any other company mentioned and receive no compensation from any company for mentioning their name or product.  We mention specific models and pricing only as reference and make no judgement on the value of such purchases to consumers.  
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Years ago we saw a mock-up of an OLED device that looked like a large pen.  It had a tab that allowed the user to pull out a flexible OLED display that showed full color images and text, as if you were reading a magazine or newspaper., which you could wirelessly update or switch pages with the press of a button.  As one who has spent many hours on trains commuting to and from work, the idea of such a device remained a futuristic but eminently achievable industry goal in our minds, and we have followed the display space closely ever since. 
It seems that we are getting ever closer to that dream as Samsung Display (pvt) promises to show an updated version of their flexible and rollable displays at the upcoming SID show next week.  The product is called Rollable Flex, and while it is similar to other SDC display products, and those of other display manufacturers, it takes the rollable concept a bit further.  Typically rollable displays are able to expand their surface area by 3x by maintaining a wide circumference around a drum, or in some cases folding across the interior of a device, however the folks at SDC have come up with a display that is able to be more tightly ‘wound’ around a cylinder without damage, and is able to expand its surface area by 5x, with the show demo being 49mm (1.9”) long when rolled to 254.4mm (10.01”) long when unrolled by wrapping it tightly around a cylinder.
While rollable OLED displays exist currently, they do not have the physical characteristics to be tightly wound without showing stress and eventual more serious damage.  While all of the materials in an OLED stack have their own ‘modulus of elasticity’, a fancy way of saying its resistance to being deformed, much of an OLED display’s flexibility is not determined by its substrate but by the material used to create the OLED stack’s anode.  The anode must be transparent if the light from the OLED emitters is to exit the pixel, and the most common material for OLED anodes is ITO, or indium Tin Oxide, which it typically sputtered[1] onto the substrate.  ITO is unusual in that it has both high electrical conductivity and optical transparency, a rare combination, along with ability to be finely etched, however the material is also brittle, the antithesis of what is needed for rollable displays, and is also permeable enough to allow oxygen and water vapor into the OLED stack, which destroys OLED materials.
In rigid OLED displays, the ITO is deposited on glass, and with a second ‘base’ glass substrate, locks the ITO and other OLED materials away from oxygen and water, however rollable displays must be built on flexible substrates which leaves the ITO and other material open to damage.  The solution for this issue is ‘layer’ other impermeable but transparent materials over the ITO, a process called encapsulation, solving the contamination issue.  That said, ITO’s brittleness is still an issue, and we expect SDC has come up with either an ITO substitute or modified ITO mixture that allows the material to have a higher elasticity modulus that exceeds that of current materials, and the odds are that SDC will not reveal the details of the difference from ‘normal’ and less flexible OLED stack components.
While this is all technical, it does pave the way for progressively smaller rollable devices and puts into sight the one-day pocket pen that opens into a large, full color display.  Samsung has already patented a number of ‘hybrid’ devices that use a rolled OLED display and a mechanical pull-out frame that holds the display when open, but these are typically the size of smartphones when closed, still a reach from the pocket-pen newspaper.


[1] Sputtering is a process  that involves the creation of plasma that ionizes the mater5ial (source) which forces the molecules out of the source  and on to a target material as a thin film.