Samsung IT enters the automotive industry

According to relevant sources, Samsung Electronics and other subsidiaries of the Samsung Group are trying to enter the automotive business field and provide related technologies to automakers. However, compared with its competitors, Samsung's move came too late, after all, other companies have already signed a lot of lucrative cooperative transactions in the automotive industry, this barrier to entry is clearly difficult to break through.

According to data compiled by Thomson Reuters' IP & Science department, Samsung Electronics and other Samsung subsidiary's technology subsidiaries are increasing their R&D efforts in automotive technology. Of the total of 1,804 U.S. patent applications filed since 2010, two-thirds are related to electric vehicles and automotive electronic components.

However, due to the lag between filing and publishing, these data do not include applications submitted after 2013.

Currently, they have not yet obtained more significant business progress. Samsung Group also declined to comment on this development strategy, but the attractiveness of this market is obvious.

According to Dominique Bonte, an analyst at ABI Research Research, major car manufacturers have combined or are developing advanced technologies to enhance their safety and provide better car entertainment systems that connect smart phones. , to create opportunities for technology companies to enter this $500 billion automotive-related software, services and components market.

Bont said: “There are currently two major trends in this market: First, cars become a networking software device; second, the entire mobile and information and communication (ICT) ecosystems are very much looking forward to participating in this change.”

With the slowdown in demand for smart phones, TVs, and computers, the IT industry especially wants to take a seat in the automotive sector, but Samsung has missed opportunities in this area, and some of its best partners have already been replaced.

In October this year, Samsung’s domestic rival LG Electronics has signed an important supply agreement with General Motors, making LG’s share price soar. At the same time, U.S. chipmaker Nvidia also stated that its chips will be used in more than 30 million vehicles in the next three to four years.

Unlike Apple and Google, there is currently no clear indication that Samsung is developing its own autonomous driving technology.

IHS analyst Danny Kim said that Samsung Group has not yet formed a unified, group approach to establish its supplier position in the automotive industry.

Kim said: "Between all the competing organizations within the Samsung Group, the company needs to work hard to create a synergy with them."

After selling its heavily indebted auto manufacturing division to Renault Motors for 10 years, Samsung Group announced in 2010 that it will once again enter the auto industry and classify automotive battery storage as one of the company's five growth businesses.

Today, the company’s Samsung SDI is now the world’s sixth-largest maker of electric vehicle batteries, with customers including BMW, Chrysler, and Volkswagen.

Finding opportunities

At present, other departments of the Samsung Empire are also looking for opportunities.

Samsung's patent application documents show many different technologies, including a fatigued driving detection system, a car theft alarm system, and a transparent display that shows route indications and traffic information.

Electro-Mechanics Co Ltd recently established a special team to sell various components such as camera modules to new automotive customers. In addition, the company also stated that it will consider upgrading its automotive-related business by mergers and acquisitions.

Samsung Display also said that the automotive industry is a potential area of ​​development, and the company has also been working with BMW and automotive component maker Continental to test its OLED display.

The development prospects of the automotive sector are coveted.

Nvidia said that its automotive division’s revenue for the first half of this year was US$ 148 million, which almost doubled in one year.

In a 2014 report, McKinsey & Co. Consulting stated that by 2020, the revenue from hardware, software, and services of Internet-connected cars may increase from approximately 30 billion euros in 2014 to 180 billion euros (200 billion U.S. dollars).

The Boston Consulting Group said in a report this year that automakers might spend an extra $6,500 on each car if they are fully automated.

Analysts said that Samsung's established supply partnership may be expanded by bundling other Samsung sector parts and services.

However, Samsung insiders admit that other technology departments other than Samsung's horizon may take a few years to achieve significant sales related to the automotive business.

The product development cycle of the automotive industry is much longer than that of consumer electronics, and car manufacturers will not easily increase inexperienced suppliers. It took Nvidia seven or eight years to become a global supplier and gain recognition in the automotive industry. LG also won the component supply contract for Chrevrolet Bolt after nearly ten years of cooperation with General Motors.

Analysts said that Samsung Electronics could also emulate LG Electronics and use a one-stop service strategy to catch up with other companies, that is, to cooperate with its sister companies to provide unified batteries, chips, sensors and software, such as the Tizen operating system.

ABI analyst Boont said that Samsung can also accelerate the advancement of its automotive business by acquiring a number of well-known companies, such as the acquisition of Renesas Electronics Corp. - Last year, Gartner researchers said that the company is the world's top car Semiconductor manufacturers, the current year's revenue reached 3.1 billion US dollars.

He said: "For a supplier, it is important to be able to provide the components of the entire platform, not a single component."