Samsung acquires 2% stake in BYD

[THE INVESTOR] China’s largest electric car maker BYD on July 21 announced that Shanghai Samsung Semiconductor, a unit of Samsung Electronics, has acquired its 52.3 million shares for 3 billion yuan (US$450 million).

With the acquisition, Samsung has become BYD’s ninth-largest shareholder with a 1.92 percent stake.

BYD, which started as a rechargeable battery maker, is currently the largest EV maker not just in China but also globally. 

“The latest investment aims to strengthen our partnership on automotive and smartphone parts. Samsung will not participate in BYD’s management,” the company said in a statement last week.

“The key purpose is strengthening our leadership in the soaring automotive chip market,” it added.

The Samsung-BYD partnership comes as Samsung has been pouring considerable resources into automotive parts, especially for futuristic electric vehicles, launching a separate automotive parts business division in December last year.

Despite some presence in the EV battery market, the company has not yet secured a firm footing in the field. Samsung SDI is supplying batteries to global carmakers, being the sole supplier to BMW’s electric models.

Samsung SDI could benefit by securing orders from BYD in the all-important Chinese market where the government is threatening to cut subsidies for EVs using its nickel-manganese-cobalt-oxide batteries, or NCM.

Some critics speculated that the two firms also could share battery technologies. BYD, a leading player in the less advanced lithium-ion-phosphate batteries, or LFP, has already been included in a tentative list of companies subject to China’s EV subsidies that take effect from 2018.

But Samsung flatly denied the speculation, saying its BYD investment has nothing to do with the battery-making unit.

By Lee Ji-yoon (jylee@heraldcorp.com">jylee@heraldcorp.com)