Samsung Write-off
Samsung Electronics has opted out of the medical device business after four and a half years by handing over the unprofitable business unit to Samsung Medison.
Samsung Medison, which manufactures ultrasonic diagnostic systems, was acquired by Samsung Electronics in 2011. At present, Samsung Electronics owns 68.45 percent of Samsung Medison. Although Samsung Medison is the largest ultrasonic diagnostic system supplier in Korea, it accounted for just 3.1 percent of the global market in 2012. Last year, it recorded 250.7 billion won (US$225.3 million) in sales but only 800 million won (US$719,072) in operating profits.
The global medical equipment market is growing quickly, and it is estimated to reach at least US$450 billion in size in 2018. However, Samsung Electronics failed to make meaningful profits in the market led by GE, Philips, and Siemens.
Once the transfer is completed, Samsung Medison can produce digital X-ray devices and in vitro diagnostic systems. Also, there is the possibility that Samsung Medison will take over other medical subsidiaries of the electronics company such as Nexus and Neurologica. Those sunsidiaries are supplying heart disease diagnosis instruments and portable CT machines, respectively.