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Lucrative new revenue sources

As the market of Samsung Electronics’ main cash cow of memory chips shows signs of tailing off, the info-tech giant sets its eyes at a promising segment of automotive chips.

On March 19, the Seoul-based company showcased a new video clip aimed at demonstrating its competitiveness in various chips used for self-driving vehicles.

 

Shown above is a captured image of Samsung Electronics' video clips on automotive chips. Courtesy of Samsung Electronics

“Samsung is dedicated to developing the future of safe autonomous driving with components and solutions that prioritize safety above all else,” a Samsung official said.

“In order to enable effective, high-speed driver feedback, Samsung’s automotive memory solutions for processing, storing and accessing information are paving the way for seamless and safe autonomous driving experiences.”

Samsung chalked up handsome profits for the past few years thanks to the rising demands for memory chips. But their prices started going down last year, chipping away at the firm’s bottom lines.

Against this backdrop, the firm seeks an alternative revenue source at the global automotive chip market whose size is estimated to top $40 billion this year.

Toward that end, Samsung announced two new brands of Exynos Auto and ISOCELL Auto last October.

“Samsung’s new automotive brand solutions bring Samsung’s market-proven technologies to automotive applications with enhanced features and durability required by the market,” Samsung vice President Kenny Han said at the time.

“With fast communication, accurate sensing and powerful processing capabilities, Samsung’s Auto-branded solutions will enable new driving experiences to next-generation smart vehicles.”

Samsung's love-hate relationship with automotive business

Samsung prepared for its automobile-related businesses for a while. For one, it spent $8 billion to acquire Harman International Industries, a U.S. automotive part supplier, in 2017.

Founded in 1956, Harman has gained fame as a maker of premium audio products before tapping into the automotive parts business. About two thirds of its turnover comes from the automobile division.

Samsung’s relationship with the automotive business goes back to the early 1990s.

Back then, now bed-ridden Chairman Lee Kun-hee spearheaded the group’s advancement into the car business. In the aftermath of the Asian financial crisis, however, Samsung sold the business to Renault in 2000.

 
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