Samsung expects strong auto growth from Harman acquisition
November 6, 2018 @ 12:27 pm
Axel Bugge
Reuters
Samsung Electronics President Young Sohn, left, with Harman International CEO Dinesh Paliwal in a 2017 photo. Samsung's $8 billion purchase of Harman this year deepened the Korean giant's stake in automotive overnight.
Send us a Letter
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.
LISBON -- Samsung Electronics expects strong growth at its audio and auto electronics unit Harman, which has put the company "firmly in the picture of the automotive industry" as it eyes the autonomous car market, its chief strategy officer said.
Samsung, the world's largest semiconductor manufacturer, completed the Harman acquisition last year for $8 billion.
"Now it's almost 20 months, still not two years (since the purchase), but I would say the honeymoon is over. Now we are in a business," Young Sohn, Samsung's Silicon Valley-based president and chief strategy officer, told Reuters on Tuesday during the Web Summit conference in Lisbon.
Harman, known for its audio speakers, has a large automotive business encompassing navigation services, on-board entertainment systems and vehicle networks.
"The company (Harman) made its numbers, in terms of revenue growth and profit. And we continue to expect double-digit growth, which I think is really good. It firmly puts Samsung in the picture of the automotive industry," he said.
He added "we are always interested in partnerships, investment, acquisitions."
As autonomous car technology develops, Sohn said Samsung was working with automobile companies on development of 5G networks, needed for autonomous driving.
"The question is, can they do it alone?" Sohn asked about car companies' ability to develop all the technology needed.
"They (car companies) have to navigate things like: should they adopt Android, or not? What do they do with their data? Do they give it to Google? These are new problems they haven't seen before," he said.
He cautioned that full autonomous driving is still a while away, although on a limited scale, it could happen "very soon" in some parts of China.
Asked about a drop of 27 percent in Samsung's capital expenditure this year, Sohn said that reflected a calmer cycle in the flash memory market and not other areas of spending.
"So you will continue to see us invest, continue to spend, but right now the memory cycle is such that there is a bit of oversupply of NAND (memory) so we decided to slow down."
He said last year Samsung spent $46 billion, including on r&d. "If you look at any other company in IT, we spend more money than anybody," he said.
Taking part in Europe's biggest tech conference, Sohn predicted that artificial intelligence will "disrupt everything as we know it, from publishing, all the way to travel ... and the way we serve our food," adding though that he was optimistic about AI and that it will create more jobs.
Contact Automotive News