(Yicai) April 9 -- South Korean consumer electronics giant Samsung Electronics is expected to restructure its Chinese business, according to industry insiders.

Samsung Electronics is set to adjust its strategy in China, possibly focusing solely on its mobile phone and storage businesses, while shifting its priority toward semiconductors, insiders told Yicai.

Samsung's white goods business in China will likely shift to an agency model from a self-operated model in the second half of the year, Chen Hui, general manager at home appliance market research firm AVC Revo, said to Yicai. Its Chinese black goods business may also shift to an agency model, he added.

Industry sources indicate that Samsung Display's Chinese distributors have already suspended shipments.

Samsung sold about USD3 billion worth of color televisions, USD1 billion of home appliances, and USD20 billion of mobile phones in China in 2014 and 2015, an insider told Yicai. Its sales targets for color TVs and home appliances this year are about 5 percent and 1 percent, respectively, of the peak years.

Due to the rise of Chinese brands and their expansion in the high-end segment, Samsung's share in China's home appliance market has been declining in recent years. In March, Samsung missed the 2026 Appliance and Electronics World Expo for the first time in years.

Samsung's share in the Chinese TV, refrigerator, and washing machine markets was 3.6 percent, 0.4 percent, and 0.4 percent this year as of April 5, ranking fifth, 14th, and 15th, respectively, according to data from AVC.

"Samsung's home appliance business in China is contracting," an East China home appliance retailer told Yicai, adding that they only cooperate with Samsung on TVs, but related sales are small.

Another home appliance retailer from Northwest China said they have a partnership with Samsung for central air conditioner products, but their collaboration on TVs ended two years ago.

"The strategic adjustments of Samsung in China are the result of the global competitive landscape and the company's own strategic choices," Dong Min, secretary-general of the China Video Industry Association, told Yicai.

This marks a further retreat of foreign brands in the Chinese consumer electronics sector and reflects the rise of China's display and consumer electronics industry, Dong added.

Samsung has a broad industrial layout in China, thus assessing its strategic adjustments in the country solely based on the sales performance of some products may be somewhat overgeneralized, according to a senior industry insider.

Editor: Futura Costaglione