Hyundai Motor No Longer Just a Car Company
Samsung and LG Electronics Participate in Global Motor Shows
Hyundai Motor Company declared that it is no longer just a car manufacturer and boldly set out to find new business opportunities. Samsung and LG quietly filled the void, asserting that they are indeed car manufacturers. The traditional domains that Korea's leading companies have protected are collapsing.
Samsung Electronics and LG Electronics, which are increasing their share in the automotive electronics (electric and electronic components for vehicles) business, announced on the 3rd that they will participate for the first time in one of the world's three major motor shows, the ‘IAA Mobility 2023’.
On the other hand, Hyundai Motor Company declared its absence from the event for the first time in 20 years, citing the lack of representative models to unveil at the motor show. Instead, on the same day, Hyundai announced an investment in an artificial intelligence (AI) semiconductor company. They invested $50 million (approximately 64.2 billion KRW) in Tenstorrent, led by Jim Keller, who played a key role in designing Apple's A-chip and AMD's Ryzen CPU. The two companies will jointly develop customized AI semiconductors for automotive use.
Samsung and LG Participate in the World’s Top 3 Motor Shows, Hyundai Absent
The semiconductor and electronics industries interpret Samsung Electronics and LG Electronics’ first participation in IAA Mobility as a declaration that automotive electronics have become the core business not only for the companies but for the entire groups. The IAA Mobility, held from the 5th to the 10th of next month in Munich, Germany, is an event where automotive manufacturers and parts suppliers from around the world gather to share technology and design the future of mobility. It is regarded as an opportunity for industry leaders to showcase innovation and set directions for future changes. With the automotive electronics business moving beyond the initial stage and becoming profitable, Samsung and LG Electronics can use their participation in IAA as a turning point to expand their business focus from IT devices and home appliances to automotive electronics.
At IAA Mobility, Samsung Electronics plans to introduce its vision for automotive memory through three core themes: autonomous driving, centralized computing, and V2X (vehicle-to-everything) communication. Samsung expects that by 2030, alongside servers and mobile devices, automobiles will become one of the top three semiconductor application areas. Samsung is expanding its market presence by showcasing various automotive memory products, including Universal Flash Storage (UFS) 3.1. The company has also set a goal to surpass US-based Micron and become the number one player in the automotive memory market by 2025. Samsung Display will also participate in IAA Mobility for the first time to promote its competitiveness in automotive OLED panels.
Not only Samsung Electronics but all Samsung Group’s electronics affiliates are seeking their future in the automotive sector. For example, Jang Deok-hyun, president of Samsung Electro-Mechanics, frequently tells employees, "Our company is an automotive company." Earlier this year, the company reorganized its main business divisions (Package Solution Division and Component Division producing MLCCs) to include an automotive electronics team, signaling that both the present and future of the company lie in automotive electronics.
LG Electronics to Announce Mobility Future Vision at Motor Show
LG Electronics will also participate in IAA Mobility as a sponsor. The company plans to present its unique vision for the future of mobility. Along with showcasing what can be experienced inside future vehicles, LG will demonstrate an advanced mobility ecosystem to partners and customers. Regarding its participation in IAA Mobility, LG Electronics stated, "The automotive electronics business has emerged as a major business and growth engine, and LG’s competitiveness is being recognized. We are expanding the customer insights and experience know-how accumulated through home appliances and IT products into the mobility sector."
Last month, LG Electronics announced a vision to transform from a ‘global leading home appliance brand’ to a ‘smart life solution company’ that connects and expands diverse customer experiences. The company also revealed plans to more than double its automotive electronics business revenue by 2030, evolving into a ‘global top 10’ automotive electronics company with sales reaching 20 trillion KRW.
Samsung Electronics and LG Electronics’ automotive electronics businesses have already moved beyond the initial stage and entered a phase where they can reliably supply products to global automakers and generate profits.
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Since entering the automotive semiconductor market eight years ago, Samsung Electronics currently supplies products to major automotive companies and original equipment manufacturers (OEMs). Harman, a US automotive electronics and audio company acquired by Samsung in 2016, saw its operating profit soar to 250 billion KRW in the second quarter of this year, a 150% increase compared to the same period last year, thanks to the expansion of the automotive electronics business. LG Electronics is expected to have an automotive electronics order backlog nearing 100 trillion KRW by the end of the year, having already accumulated 80 trillion KRW in orders by the first half. The company is actively exploring new opportunities in future mobility areas such as autonomous driving, software solutions, and content, responding to trends like vehicle electrification and connected services.
In contrast, Hyundai Motor Company has abstained from all major auto shows held this year. The official explanation is that the benefits gained from attending motor shows do not justify the costs. Additionally, since the Ioniq 5 N was already unveiled at the Goodwood Festival in the UK, there are no new exhibits to attract attention, which is another reason for skipping this motor show.
Hyundai first revealed its vision of the future, called ‘Metamobility,’ at CES 2022, the world’s largest electronics and IT exhibition held in Las Vegas, USA, a year and a half ago. Hyundai stated that it is likely to participate in the CES event held five months later. The eco-friendly vehicles Hyundai is currently focusing on are not electric cars that burn fossil fuels but rather electronic devices powered by electricity. While Hyundai, Korea’s representative car company, is transforming into an electronics company, Korea’s leading electronics companies LG and Samsung are changing their identities to become car manufacturers.
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