South Korean electronics giant Samsung Electronics said on July 15 that it had agreed to acquire a stake in Chinese automaker BYD to enhance its electric auto parts and smartphone component business.
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Samsung has created a team to develop automotive-related businesses, seeking a new sector to drive earnings amid signs that the global smartphone industry – its profit mainstay – is slowing.
“The primary goal of the investment is to strengthen operations for semiconductors for electric vehicles”, the company said, adding that it “plans to discuss [with BYD] further cooperation in a variety of areas”. Samsung said that the investment aims to bolster the two companies’ partnership in electric vehicles and smartphone components and won’t affect management of the Chinese company.
“We plan to discuss cooperation in various businesses going forward”, Samsung said in a statement announcing the investment.
BYD, the largest electric vehicle maker in the world, is the main supplier of metal cases for the Galaxy S6 series and the more recent Galaxy S7 series and the upcoming Note 7. Earlier in the day, a local newspaper reported that Samsung would invest 3 billion yuan ($448 million) in the Chinese company.
BYD confirmed in a stock exchange filing that Samsung Electronics had participated in their non-public issuance, but did not disclose the amount of its investment as the offering had yet to close.
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Samsung apparently hopes to increase parts supplies to BYD and maneuver further into China’s green vehicle market, which has been rapidly expanding thanks to generous state support. Samsung SDI shares trimmed gains and were trading up 2.3 per cent as of 0310 GMT. The automaker, however, denied Samsung Electronics would buy a 4 percent stake as reported in the Korea Economic Daily.
