Lee Jae-yong in Stuttgart seeks auto parts business expansion

Samsung Electronics Vice Chairman Lee Jae-yong is currently in Stuttgart, Germany, to seek partnerships with German carmakers, The Korea Herald confirmed Wednesday, suggesting the tech giant is making aggressive moves to expand its automotive parts business.

Stuttgart is home to some of the world’s biggest premium automakers, including Daimler-Benz, Porsche and auto parts maker Bosch.

“Vice Chairman is currently on a business trip to Canada and Europe, meeting with talents for new businesses, mainly artificial intelligence and automotive parts that he is focusing on,” said a Samsung official. 

Lee’s visit to the city seems timely with ongoing organizational shakeups at Samsung’s semiconductor and mobile business divisions, which are aimed at enlarging the automotive team and possibly leveling it up to a business unit.

The chipmaking unit of Samsung has recently launched new automotive chip brands Exynos Auto for processors and ISOCELL Auto image sensors, eyeing an expected market of $42.4 billion by 2020.

Considering the new launch and following steps for expansion, Lee’s meetings with the German automakers are deemed crucial for the new growth business of Samsung.

“As the vice chairman included automotive parts as one of four new (growth) businesses, related workforces are being moved to the auto parts business not only in the semiconductors division but also from other divisions,” another Samsung official said. “Such workforce relocations are taking place as usual when needed.”

Some engineers who specialize in software at Samsung’s Semiconductor R&D Center and IT & Mobile Communications divisions are being assigned to work for System LSI Business, which produces the Exynos Auto processors, ISOCELL Auto image sensors and other auto parts.

“System LSI is enhancing the automotive parts business by winning the software workforces to develop various chips and systems needed for auto parts, including the advanced driver assistance system,” an executive at Samsung told The Korea Herald.

Considering the moves, Samsung is aggressively gearing up for the automotive parts business by establishing a portfolio ranging from automotive processors -- neural processing units and graphics processing units -- image sensors, in-vehicle infotainment systems, telematics to advanced driver assistance systems.

A high-level executive at Samsung’s Device Solutions Division also said, “Samsung is working hard to develop Samsung’s own GPU dubbed ‘SGPU’ with a plan for commercialization in the near future.”

The GPU market, key to autonomous driving, is currently dominated by Nvidia with around 70 percent share. Samsung is starting to jump into the market with an aim to take over leadership.

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