Samsung eyes making self-driving car parts

10 Dec 2015 | Author: | No comments yet »

Samsung Electronics to form auto team in search of growth driver.

SEOUL— Samsung SSNHZ 0.00 % Electronics Co. said Wednesday it will establish a new team for developing next-generation auto parts, joining global technology heavyweights in betting on the automotive market to drive growth.New revenue drivers: Samsung is turning to the auto industry to reduce its reliance on its struggling smartphone division, which many analysts believe is already past its zenith.

Samsung Electronics Co. will focus on autonomous driving, information and entertainment components for automobiles in its push to boost sales in the car parts business, where South Korean rival LG Electronics Inc. has established a lead. — Reuters SEOUL: Samsung Electronics Co Ltd said it will create a team to develop automotive-related businesses, as it searches for a new profit driver while struggles at its smartphone division deepen. Samsung, the world’s largest maker of chips and smartphones, named Park Jong Hwan, executive vice president, to head the effort, it said today in a statement. Electronics makers from Apple Inc. to Panasonic Corp., LG and Samsung are vying for slices of an automobile industry that expects to put autonomous, or driverless, vehicles packed with electronic sensors and displays on the road in this decade.

The announcement is the company’s first official acknowledgment of its interest in the automotive business where information technology is expected to play an increasing role in the gradual shift toward next-generation cars including electric vehicles and self-driving cars. Investors and analysts have increasingly called on Samsung to leverage its strength in fields such as chips and displays to tap demand from carmakers seeking increasingly sophisticated technologies for their vehicles.

For Samsung, the effort is also a way to help make up for declining growth in televisions and a mainstay smartphone business that’s been battered by lower-cost rivals in China and India. “Samsung just can’t leave this huge market untapped,” said Greg Roh, an analyst at HMC Investment Securities Co. in Seoul. Meanwhile, market estimates suggest profit from smartphones – Samsung’s former cash cow – is set to fall in 2015 for the second consecutive year, putting pressure on the manufacturer to find new profit drivers. US patent filings data compiled by Thomson Reuters IP & Sciences showed increasing efforts by the world’s top smartphone maker and its affiliates to push into the rapidly growing market for automotive components, software and services that is worth around US$500bil (RM2.13tril). Samsung formed an alliance with Volkswagen AG’s Audi unit to provide memory chips for the company’s dashboard, infotainment and advanced driver assistance applications, the South Korea-based company said Nov. 23. LG is supplying 11 systems for the new Bolt, General Motors Co.’s electric car, including the electric-drive motor, charger, batteries, the companies said in October.

SK Securities analyst Kim Young-woo said while Samsung Electronics is moving in the right direction, Samsung Group as a whole needs to combine key component-making operations under a single umbrella in order to succeed.

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