Samsung and LG Fill the Gap at the World's Top 3 Motor Shows Without Hyundai Motors

The Era of Major Industry Shift from Electronics to Automotive

Hyundai Motor Company declared that it is no longer just an automobile manufacturer and boldly set out to find new business opportunities. Samsung and LG quietly filled the void, asserting that they are indeed automobile companies. The traditional domains held by Korea's leading companies are collapsing.

Samsung Electronics Chairman Lee Jae-yong is seen visiting the automotive MLCC production plant located at Samsung Electro-Mechanics' Busan plant, inspecting MLCC products (July 16, 2020) [Image source=Yonhap News]

Samsung Electronics and LG Electronics, which are increasing their share in the automotive electric and electronic components (auto parts) business, announced on the 3rd that they will participate for the first time in one of the world's three major motor shows, 'IAA Mobility 2023.' On the other hand, Hyundai Motor Company declared it will not attend the event for the first time in 20 years, citing the lack of representative models to unveil at the motor show.

The semiconductor and electronics industries interpret Samsung Electronics and LG Electronics' first participation in IAA Mobility as a declaration that the automotive parts business has emerged as a core focus for the companies and their entire groups. The IAA Mobility, held from the 5th to the 10th of next month in Munich, Germany, is an event where automobile manufacturers and parts suppliers from around the world gather to share technology and design the future of mobility. It is regarded as an opportunity for industry leaders to showcase innovations and set directions for future changes. With the automotive parts business moving beyond the initial stages and becoming profitable, Samsung and LG Electronics can use their IAA participation as a turning point to expand their business focus from IT devices and home appliances to automotive parts.

Samsung Display's New Digital Cockpit exhibited at CES 2023 in January this year.

At IAA Mobility, Samsung Electronics plans to introduce its vehicle memory vision through three key themes: autonomous driving, centralized computing, and V2X (vehicle-to-everything) communication. Samsung Electronics envisions that by 2030, automobiles will become one of the top three semiconductor application areas alongside servers and mobile devices. This is why Samsung Electronics is expanding its market presence by showcasing various vehicle memory products, including Universal Flash Storage (UFS) 3.1. The company has also set a goal to surpass U.S.-based Micron and become the number one player in the vehicle memory market by 2025. Samsung Display will also participate in IAA Mobility for the first time to highlight its competitiveness in vehicle OLED panels.

Not only Samsung Electronics but all electronics affiliates within the Samsung Group are seeking the future in automobiles. For example, Jang Deok-hyun, president of Samsung Electro-Mechanics, frequently tells employees, "Our company is an automobile company." Earlier this year, the company reorganized its main business divisions (Package Solution Division and Component Division producing MLCCs) to establish an automotive parts business team, emphasizing that both the present and future of the company lie in automotive parts.

LG Electronics is also participating in IAA Mobility as a sponsor. It plans to announce its unique vision for the future of mobility. Along with presenting a vision of experiences within future vehicles, LG Electronics will showcase an advanced mobility ecosystem to partners and customers. Regarding its participation, LG Electronics explained, "The automotive parts business has emerged as a major business and growth engine, and LG's competitiveness is being recognized. We are expanding the customer insights and experience know-how accumulated through home appliances and IT products into the mobility sector."

Last month, LG Electronics declared a vision to transform from a 'global leading home appliance brand' into a 'smart life solution company' that connects and expands diverse customer experiences. It also announced plans to more than double its automotive parts business revenue by 2030, evolving into a 'global top 10' automotive parts company with sales reaching 20 trillion won.

Samsung Electronics and LG Electronics' automotive parts businesses have already moved beyond the initial stages and entered a phase where they can reliably supply products to global automakers and generate profits.

Since entering the vehicle semiconductor market eight years ago, Samsung Electronics currently supplies products to major automobile companies and original equipment manufacturers (OEMs). Harman, a U.S. automotive electronics and audio company acquired by Samsung Electronics in 2016, saw its operating profit soar 150% year-on-year to 250 billion won in the second quarter due to the expansion of the automotive parts business. LG Electronics is expected to have an automotive parts order backlog approaching 100 trillion won by the end of the year, having already accumulated 80 trillion won in orders by the first half. The company is actively exploring new opportunities in future mobility areas such as autonomous driving, software solutions, and content in response to trends like vehicle electrification and connected services.

Meanwhile, Hyundai Motor Company has not participated in any major auto shows held this year. The official explanation is that the benefits gained do not justify the costs of attending motor shows. Additionally, since the Ioniq 5 N was already unveiled at the Goodwood Festival in the UK, there are no eye-catching exhibits for this motor show, which is another reason for Hyundai's absence.

Hyundai Motor Company first revealed its vision of the future, called 'Metamobility,' at the Consumer Electronics Show (CES) 2022 held in Las Vegas, USA, a year and a half ago. Hyundai stated that it is highly likely to attend the CES held five months later. The eco-friendly vehicles Hyundai is currently focusing on are not electric cars that burn fossil fuels but are more akin to electronic devices powered by electricity. Hyundai, Korea's representative automobile company, is transforming into an electronics company. Conversely, Korea's leading electronics companies, LG and Samsung, are changing their identities into automobile companies.

This content was produced with the assistance of AI translation services.