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Tue, January 19, 2021 | 08:10
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Samsung, Hyundai seeking accessible ways to develop relations
Posted : 2020-05-17 15:46
Updated : 2020-05-17 15:58
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This combined photo shows Samsung Electronics Vice Chairman Lee Jae-yong, left, and Hyundai Motor Executive Vice Chairman Chung Euisun, Sunday. Korea Times file
This combined photo shows Samsung Electronics Vice Chairman Lee Jae-yong, left, and Hyundai Motor Executive Vice Chairman Chung Euisun, Sunday. Korea Times file

By Kim Yoo-chul

Last week's rare high-profile meeting between Samsung Electronics Vice Chairman Lee Jae-yong and Hyundai Motor Executive Vice Chairman Chung Euisun at a local battery plant operated by Samsung's battery affiliate Samsung SDI was loaded with surprises given their long yet relatively mediocre relationship.

The relationship between Samsung and Hyundai business group isn't comparable to that of Apple and Samsung Electronics, both of which are undeniably the champions of the smartphone race. However, given Samsung's earlier failed attempts to produce finished cars, it's worthwhile to observe that both are apparently praying for each other's success, senior industry sources contacted by The Korea Times said.

Samsung launched Samsung Motors in 1997 thanks to technical assistance from Japan's Nissan, and began selling cars in 1998 just before the country was hit by the Asian Financial Crisis. At the time of the Samsung move, Hyundai Motor tried to block Samsung's business expansion into the automotive industry, but the effort was in vain. Later, Samsung had to sell its major stake in the enterprise to Renault to save the corporation amid the financial crisis, while Hyundai acquired a major stake in Kia Motors.

"Samsung-Hyundai's so-so relationship was mostly due to Hyundai's dissatisfaction over Samsung's move to advance into the automotive industry. Despite Samsung's repeated commitment that it will not re-enter the automotive industry, Hyundai has been maintaining a step back stance toward Samsung as common thinking among by Hyundai management was that Samsung was a company that actually threatened its bread-and-butter business," one industry executive said.

Years ago, Samsung approached Hyundai reportedly asking it to test Samsung's early version of so-called "automotive semiconductors" to see how these chips worked and functioned in vehicles. At the request of the then government, senior Samsung and Hyundai executives agreed "tentatively" to make joint efforts on the emerging business, however, no actual partnership was ever made.

But things appear to be changing.

The ruling Democratic Party of Korea's (DPK) landslide victory in the April 15 general election is strengthening President Moon Jae-in's grip on core state affairs and the victory also helped the South Korean leader avoid lame-duck status for the remainder of his presidency. Right after the election win, Cheong Wa Dae said President Moon would focus more on ways to rev up the virus-hit local economy.

Two days before Moon's special speech marking the third year since he took office in 2017, Samsung head Lee told the public that he didn't intend to pass down core management of the country's top conglomerate to his children.

Lee apologized over past wrongdoings related to a power transfer plotted by some Samsung executives. In a televised apology, Lee also said Samsung would invest in businesses that it "did well" and actively seek out new growth opportunities that are promising but haven't been actively explored by the company before. President Moon previously indicated that logic-chips, hydrogen-related value chain, electric vehicles and OLEDs were some of South Korea's "next things."

When President Moon made state visits to European countries years ago, he used Hyundai's Nexo hydrogen sedan to visit a hydrogen gas-fueling station in downtown Paris. On a related note, Moon congratulated Hyundai Motor several times for its efforts to create an ecosystem for the "hydrogen economy." Also, the President visited Samsung's local EUV research center and OLED manufacturing line.

Not surprisingly, the meeting between Samsung and Hyundai's top management, therefore, could provide a fresh impetus for both to find businesses which will be beneficial to them. Regarding details of last week's meeting, representatives at Samsung and Hyundai downplayed its significance.

But sources familiar with the issue said Hyundai may use Samsung's small battery technology in its next electric vehicle which will probably be released in 2022.

"Usually, when the top management of companies meet, they directly touch on issues and plans that bring visible results. As the demand for electric vehicles will rise further, Hyundai is looking for new alternatives in battery sourcing. Samsung would be a good fit from this business standpoint and others," another senior industry executive said adding Hyundai is on track to develop its next electric vehicle platform to function with pouch-, solid- and round-type batteries.

LG Chem is the major battery supplier for Hyundai with the country's top automotive group procuring some inventory from SK Innovation. Meanwhile, reports said Hyundai may test Samsung's automotive application chip ― tentatively named Exynos Auto ― in its next electric vehicle.

"It remains to be seen whether or not Hyundai will use Samsung's automotive application processors because if it does, then Samsung would learn core factors of Hyundai's future electric vehicle roadmap. I believe the prerequisite about an expansion of ties between Samsung and Hyundai, is Samsung's commitment that it will not make its own vehicles," the executive said by telephone.

Samsung is the global leader in DRAM and flash-type memory chips, but is chasing Taiwan's TSMC and other custom design chip makers. Some analysts expect Samsung will acquire companies related to automotive and bio-health technologies.


Emailyckim@koreatimes.co.kr Article ListMore articles by this reporter









 
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