[New Samsung] Beyond mobile, chipsets, Samsung bets future on data business

This is the final installment of a series of articles delving into new technologies Samsung Electronics is betting on for its new source of growth. -- Ed.

Samsung Electronics is preparing to rebrand itself as a data business, shifting away from being a hardware company by undergoing major changes in its leadership and business restructuring,

“Data is new oil,” said Young Sohn, Samsung’s chief strategy officer. “About 70 percent of data around the world is being produced and stored in Samsung products. Explosive growth of data prompted demand for DRAMs to surge, providing Samsung a significant opportunity,” he said at Samsung CEO Summit in San Francisco last month.

In recent years, the list of firms Samsung has acquired or invested in share common ground in that they are all data-related. 

From SmartThings, Viv Labs and LoopPay to Harman, each company owns key technologies to create and analyze data through various platforms such as home appliances, smartphones, mobile payment and vehicle communications systems, respectively.

“The new data business will basically be related to the current memory chip business,” said a Samsung official. “Samsung’s specialty is storage devices, and in the future, connecting those data storage systems will be the key.”

“Samsung’s ultimate goal is to provide solutions for storing and managing data in an efficient manner in terms of space and power consumption,” the official added.

One of the possible data solution businesses is developing a total solution, known as processing-in-memory -- PIM -- or smart memory, in the semiconductor industry.

“Samsung once attempted to sell similar memory-embedded processors in the late ’90s, but the market was too small at the time,” said Yoo Hoi-jun, a professor at the Korea Advanced Institute of Technology. “PIM can be popular in the near future, as demand for processors with high memory capacity continues to rise to run artificial intelligence applications.”

Samsung has started developing such processor embedded chips with NPX since September, and it is slated to begin mass production by the end of the year.

The latest appointments of executives at Samsung and the following business restructuring also provide a glimpse of the smartphone and chipset maker’s transformation into a software-focused business.

Of the 221 executives promoted Thursday, 45 percent, or 99 executives, belonged to the device solutions division, Samsung’s most lucrative business unit that is in charge of chip manufacturing.

“Considering the continuing memory chip boom, Samsung is highly likely to spare no effort to expand the division,” a source said.

Samsung’s network equipment business under the IT and mobile communications division is also likely to grow as an important business in the fifth-generation network era.

“Samsung will be providing 5G network equipment for mobile carriers, which will be the backbone of cloud and data center businesses, and will enable consumption and production of massive content,” the Samsung official said.

By Song Su-hyun (song@heralrdcopr.com)