Part Focus
Electronics affiliates of the Samsung Group are focusing on auto parts as their new future growth engines. Analysis says that they will find a breakthrough in the auto parts sector that is growing with a boom in the eco-friendly and smart car market instead of smartphones that hit limits.
According to industry sources on Nov. 2, electronic parts affiliates of Samsung Electronics such as Samsung SDI, Samsung Electro-Mechanics, Samsung Display pointed auto parts as new growth engines in its third quarter earnings announcement. It is said that Samsung SDI which secured 2,585 billion won in cash by selling off its chemical business is considering building a factory for car batteries in Europe after Xian, China.
“Funds from selling off the chemicals division will go into the car battery business,” said Kim Ik-hyun, an executive director of Samsung SDI in a conference call about third quarter earnings on Oct. 30. “We will expand production volume about ten-fold by investing a total of three trillion won by 2020.”
Samsung SDI expects to post 600 billion won which is double last year’s sales of about 300 billion) in the car battery business. The company aims to double its sales to more than one trillion won next year.
By increasing sales a great deal in the electronic auto parts market, Samsung Electro-Mechanics is planning to raise its level to the extent that it will be able to open it related business performances as early as next year. Not only Samsung Electro-Mechanics but Samsung Electronics and Samsung SDI are not disclosing their sales in the auto parts sector.
Samsung Display is also planning to make inroads into the car infotainment market with AMOLED displays. Samsung Display loaded all dashboards including central information displays in the e-Tron, an Audi concept car, with eight AMOLED displays at the IAA2015 Motor Show, held in Frankfurt, Germany last month.
Samsung Electronics has not yet produced tangible results related to electric cars. But the tech giant mentioned a possibility of applying system semiconductors such as application processors (APs) to vehicles by way of its homepage. Samsung Venture Investment invested US$6.5 million in smartphone auto parts company Vinli along with Cox Automotive, Continental and Westly Group.
Industrial experts predict that the sell-off the Chemicals Business Division of Samsung SDI will empower the Samsung Group to put more energy into invading markets related to automobiles. This is because Samsung Electronics needs a new growth engine under the circumstances that its smartphone business can hardly chalk up more than three trillion won in operating income a quarter.