Samsung ties robotic car dreams to Harman deal

South Korea’s Samsung Electronics plans to become a major player in autonomous driving, building on its recent $8-billion acquisition of audio and auto parts supplier Harman and its pole position in mobile communications markets.

Samsung is set to announce on Thursday at the Frankfurt Motor Show that it has set up an automotive strategic business unit for autonomous and advanced driver assistance services (ADAS), together with a $300-million fund to invest in automotive start-ups and technology.

“It’s time to communicate our intent to enter the autonomous driving market,” Young Sohn, the company’s president and chief strategy officer, told Reuters. “Samsung has been incubating this business for quite a while.”

The world’s biggest maker of semiconductors by revenue, Samsung is a consumer electronics giant that leads markets in products as varied as phones and TVs, displays and memory chips. These assets, and the inside track with car makers provided by its Harman subsidiary, give it confidence to enter an increasingly crowded auto market with other top tech names, Sohn said.

Samsung’s two biggest rivals have also moved into the connected car market over the past year, at greater cost: Intel paid $15.3 billion last month to acquire Mobileye, the current market leader in collision-detection ADAS software, while Qualcomm is seeking regulatory approval for its $47-billion deal to buy NXP Semiconductors NV, the world’s biggest maker of automotive-grade chips.

Harman, best known for its consumer audio speakers, derives 65 per cent of sales from its automotive business, supplying navigation services, on-board entertainment systems and vehicle networks that put it at the intersection of connected cars and mobile networks.

Auto industry veteran John Absmeier, who before joining Samsung in 2015 ran a pioneering autonomous driving programme at US tier-I auto supplier Delphi Automotive, has been named senior vice-president of the Samsung automotive business unit. Absmeier will retain his current job as head of smart machines for the Samsung Strategy and Innovation Center in Silicon Valley.

Sohn said the Autonomous/ADAS business unit will absorb hundreds of engineers Samsung already has working on autonomous driving technologies.

In recent months, Samsung has secured licenses for autonomous driving pilot projects in South Korea and California.

Strategy Analytics automotive analyst Roger Lanctot said Samsung is ideally placed to pull together consumer electronics, mobile devices and auto technology, but that entering the market will take time. Samsung has indicated that a 2020 time horizon is reasonable for its strategy to come together, he said.