By Kim Yoo-chul
Samsung Electronics is very close to striking sizable acquisition deals in the home appliances sector.
The top memory chipmaker also targets record sales in the non-volatile and value-added system LSI business.
Samsung reached a broad consensus Wednesday for the need of acquisition deals in home appliances amid the growing demand for white goods.
Hong Chang-wan, who leads Samsung’s home appliances division, said that the global market for washers and refrigerators is expected to reach $220 billion with the market for other white goods to surpass $400 billion.
"We need action," he said at a news conference held in Samsung's headquarters in Seoul.
Samsung also plans to release more healthcare-focused products in a follow-up move and the executive said its home appliances facility in Poland will pave the way for the firm to increase its shares in Europe's white-goods market.
"Samsung will also go for another acquisition deal in healthcare-related sectors," said Hong.
Samsung has so far risen by focusing on manufacturing rather than acquiring original technologies.
Now it is trying to secure key technologies.
"We will go for patents," said a Samsung official. It recently bought Dutch-based Liquavista, which possesses key technologies for next-generation displays.
"Chips, televisions and handsets have reached what we see as the proper level for easier external growth. Home appliances is the next target for rapid growth," the Samsung official said, asking not to be identified.
With higher appetites for the growth in home appliances, Samsung expects to reap a record of over 10 trillion won in sales from its system LSI business.
Memory chips just read and store data and the components have already been commoditized. The industry is highly cyclical, price-sensitive and volatile according to the market situation.
On the contrary, a system chip is used just like a brain in a computing system and needs finely tuned technology. The chips are less volatile and value-added.
"We expect to create 10 trillion won in revenue within this year from 7 trillion won last year," said Woo Nam-seong, the president of Samsung's System LSI division, in weekly Wednesdays meeting with Samsung presidents.
Since 2006, Samsung's system LSI business has grown an average of 26 percent on an annual basis for the last five years, Woo
said. "Smartphones and tablets sales are exploding."
The executive said his division will strengthen mobile application processor (AP), image sensor and foundry businesses for balanced chip business with non-memories.
Samsung supplies its mobile APs to Apple’s iPhones and iPads, while it provides chips to Texas Instruments (TI) from a design from the U.S. chipmaker.
Samsung is also constructing a chip plant in Texas with the aim to supply more mobile APs to customers including Apple.