Samsung and LG to Meet Mercedes-Benz Chairman: "Breaking Into the Global Core Supply Chain"

Dinner with Chairman Lee Jae-yong after Meeting LG Executives
Samsung SDI and LG Innotek Expected to Enter Supply Chain

Coinciding with the visit to Korea by Ola Kallenius, Chairman of Mercedes-Benz, Samsung and LG affiliates such as Samsung SDI and LG Innotek have launched a full-scale effort to enter the world-class supply chain at the Tier 1 (global primary core supplier) level. Samsung Chairman Lee Jae-yong is personally overseeing the expansion of collaboration, while LG is leading with its automotive electronics affiliates.

According to the business community on November 13, Chairman Kallenius is scheduled to meet with LG affiliate executives, including LG Electronics CEO Cho Joo-wan, at the LG Twin Towers in Yeouido, Seoul, immediately after arriving in Korea. He will then meet Cho Hyun-sang, CEO and Vice Chairman of HS Hyosung, a dealer partner, and later attend a dinner with Samsung Electronics Chairman Lee Jae-yong.

The main focus of these consecutive meetings is to expand partnerships in automotive electronics (electronic and electrical equipment for vehicles). If Korean companies supply core automotive electronic components such as semiconductors, batteries, and displays to Mercedes-Benz's next-generation platform, they are effectively recognized as global Tier 1 suppliers. As a result, Korean companies are making every effort to secure a place at the top of Mercedes-Benz's supply chain.

Samsung Electronics currently only collaborates in the area of in-vehicle infotainment systems and has not yet firmly established itself within the Mercedes-Benz supply chain. Through its subsidiary Harman, Samsung supplies the next-generation MBUX infotainment system platform for the luxury electric vehicle EQS. With Chairman Lee Jae-yong personally engaging in business development alongside Samsung SDI President Choi Joo-sun and Samsung Display President Lee Cheong, there is attention on whether this will lead to new opportunities for collaboration.

In particular, Samsung Electronics' Device Solutions division and Samsung SDI have built premium automaker references by supplying automotive semiconductors and electric vehicle batteries to BMW and Audi, respectively. However, there have been no direct transactions with Mercedes-Benz. Samsung Display is reportedly in discussions with Mercedes-Benz regarding the supply of automotive OLED panels.

Chairman Lee Jae-yong is directly focusing on expanding into the Mercedes-Benz supply chain. This meeting with Chairman Kallenius marks their second encounter this year, following the China Development Forum (CDF) in March. An industry official noted, "Since Mercedes-Benz currently sources its automotive system-on-chip (SoC) from Nvidia, Samsung may pursue collaboration by targeting demand for other automotive semiconductors rather than the main chip." This is interpreted as a strategy that envisions a division of labor in which Nvidia handles the core control chip, while Samsung Electronics supplies peripheral automotive semiconductors such as memory and power management components.

Top executives of LG's major affiliates visited the Mercedes-Benz headquarters in Stuttgart, Germany, last March to hold a meeting among management. Ola Kallenius, Chairman of Mercedes-Benz, SNS

LG affiliates, which have maintained a '20-year partnership' with Mercedes-Benz, are also making every effort to enter the supply chain as Tier 1 suppliers. By inviting Chairman Kallenius to the Twin Towers, LG is mobilizing its top executives-including CEO Cho Joo-wan, LG Display CEO Jeong Cheol-dong, LG Energy Solution CEO Kim Dong-myung, and LG Innotek CEO Moon Hyuk-soo-to seek expanded collaboration.

Among these, LG Innotek, which has yet to establish a direct business relationship, is considered a key focus of this meeting. Of the affiliates conducting automotive electronics business within the group, only LG Innotek has not secured Mercedes-Benz as a client. The company is expected to explore the possibility of supplying automotive electronic components such as advanced driver-assistance system (ADAS) sensors.

LG Display has been supplying automotive displays since 2004 and is recently expanding its collaboration with next-generation products such as OLED. LG Electronics provides software related to in-vehicle infotainment. LG Energy Solution emerged as a key supplier after signing a next-generation battery contract worth 15 trillion won in September.

An LG Group representative stated, "LG's automotive electronics products are aligned with Mercedes-Benz's next-generation strategy and direction, and since automotive electronics is a core future business for LG, there are high expectations for the signals sent by this high-level meeting."