Samsung, LG, SK clash over auto parts business

Samsung Electronics' Exynos Auto chip / Courtesy of Samsung Electronics

By Jun Ji-hye

Samsung, LG and SK are moving quickly to strengthen their business portfolio in automotive electrical parts and systems by developing new products and setting up new divisions to capitalize on the rapidly growing market, company officials said Monday.

The scale of the global market for automotive electrical parts is expected to reach $303.3 billion in 2020 from $239 billion in 2015, according to Strategy Analytics.

Samsung Electronics is seeking to enhance its competitiveness in the automotive semiconductors market after launching its first automotive chip brand, Oct. 16.

During the IZB 2018 International Suppliers Fair held in Wolfsburg, Germany, Samsung introduced the Exynos Auto automotive processor, and the ISOCELL Auto automotive image sensor.

“By launching our first automotive semiconductors brands, we are seeking to expand our field of business to the car market beyond the mobile phone market,” a Samsung official said. “In general, chips for cars require a higher quality in their use environment and product life than chips for smart devices do. We plan to offer the optimal driving environment through our reliable products.”

In August, Samsung announced it was going to invest 25 trillion won ($22 billion) over the next three years to nurture new growth engines. At the time, the firm stated four areas, and automotive electrical parts was one of them, along with artificial intelligence and fifth-generation networks.

LG has recently created a new department in charge of car parts under the wing of its holding company, LG Corp. during its year-end reshuffle. The move was aimed at creating synergy with relevant businesses pushed for by LG Electronics and LG Innotek.

In August, LG Electronics acquired ZKW, an Austrian automobile lighting supplier, to expand its customer base as global automakers such as BMW and Porsche are ZKW's customers.

LG Innotek, the electric parts manufacturing subsidiary of LG Electronics, has consistently signed new contracts won by its department in charge of automotive electrical parts, with market observers expecting the scale of the new contracts to reach a record high this year.

The company has also been focusing on the development of new products. Most recently, it completed the development of the Nexlide-L, an ultra-thin line lighting module for vehicles, which emits bright and uniform light from the module's 3-millimeter-wide aperture.

LG Innotek's Nexlide-L, a line lighting module for vehicles / Courtesy of LG Innotek

“It is the thinnest among exterior automotive lamps,” a LG Innotek official said. “Car manufacturers and drivers will be satisfied with the high-quality lighting component.”

For its part, SK plans to mobilize its main affiliates ― SK Innovation, SK Telecom and SK hynix ― to showcase its vehicle technologies during the upcoming Consumer Electronics Show (CES), scheduled to be held in Las Vegas in January.