Samsung Snatches German ADAS King for 3T, Builds Car Data Empire

● Samsung Swallows German ADAS Crown for 3T, Data Empire Next

If you have started reading this, you probably came here wondering why Samsung Electronics bought German core point technology without even making cars, and how this will affect your stock account or economic trends.

Here, contained are the 5 key elements (Eye, Ear, Brain, Heart, Memory) of the ‘Samsung Inside’ strategy not often covered in other news, and the story of the real money-making structure called ‘Data Hegemony’ and ‘Subscription Economy’ beyond simple parts sales.I have explained the crisis of the German automotive industry, Samsung’s big picture, and the impact on us in a very easy-to-understand way, so if you read to the end, you will definitely gain insights.

Samsung Swallows Germany’s Pride for 3 Trillion Won: The Big Picture to Dominate the Era of ‘Computers on Wheels’

1. The Crisis of the German Automotive Empire, and Samsung’s Opportunity

First, we need to address why Germany, the home of the automobile, had to sell its core point business. The landscape of the automotive market is flipping completely.

[Germany in Software Shock]In the past, having a good engine and transmission was the best. That’s why Mercedes, BMW, and Audi swept the world. But now? Cars are changing from ‘machines’ to ‘electronic products’.They say 100 million lines of software code go into modern new cars. Considering the latest F-35 fighter jet has 24 million lines, a car has become a computer four times more complex than a fighter jet. This is called an SDV (Software Defined Vehicle), and Germany is struggling here.

Volkswagen’s Humiliation: Delivery of flagship models was suspended due to software errors, and even sold cars were recalled. Eventually, they are considering factory closures and layoffs for the first time in history.
Domino Crisis of Parts Makers: Giant companies like Bosch and Continental are also laying off thousands to tens of thousands of people. They handle machines well, but they have collapsed in front of coding.

[Debt-Ridden Dinosaur, ZF]In this situation, the one that took the deciding blow was ‘ZF’, a German parts manufacturer with 110 years of tradition. While revenue is in the trillions, debt stands at 15 trillion won, with interest payments alone costing 2 trillion won every year. Eventually, they had to sell their most profitable business division with tears in their eyes. And Samsung snapped it up.

2. The Real Reason Samsung Bought a 22 Trillion Won Business for 3 Trillion (feat. Legal Necessities)

What Samsung acquired this time is ZF’s ‘Advanced Driver Assistance Systems (ADAS)’ division. The acquisition price is approximately 3 trillion won.What’s surprising is that the money ZF poured into growing this business exceeds 22 trillion won. Samsung picked it up at one-tenth of the price. What on earth did they buy to justify this?

Securing the ‘Eyes’ of the Car: It is a place that makes cameras and sensors that read lanes, measure the distance to the car in front, detect pedestrians, and apply the brakes.
Not a Choice, but Essential: This is a real key takeaway. In Europe, selling a new car without this function is illegal starting immediately from July 2024. It also becomes mandatory in the US from 2029.
No. 1 Market Share: It ranks first with a 30% global market share. The number of cameras sold so far exceeds 75 million. In other words, Samsung has secured the parts that are absolutely necessary for cars to be sold worldwide.

3. Samsung’s Chilling Strategy: ‘Samsung Inside’ (Completion of 5 Major Organs)

Now, here is the core point. Samsung didn’t buy this simply to sell camera parts.If you look at Samsung’s automotive electronics portfolio by comparing it to the human body, a truly scary picture emerges. Samsung doesn’t make cars directly, but it has become the only company in the world equipped with all 5 core organs that move a car.

Eye (Vision): The ZF division acquired this time (Cameras, Sensors).
Ear (Infotainment): ‘Harman’, acquired in 2017. In charge of in-car audio, screens, and information delivery. (Already global No. 1 level)
Brain (Processor): Samsung System LSI’s ‘Exynos Auto’. The semiconductor chip that judges and issues commands.
Heart (Power): Samsung SDI’s battery. The life of an electric vehicle.
Memory (Storage): Samsung Electronics’ automotive memory semiconductor. The role of storing driving data (Global No. 1).

[What Apple Gave Up and Tesla Doesn’t Have]Apple gave up on the Apple Car, right? Tesla is good at autonomous driving but buys batteries to use, right? Sony has to partner with Honda, right?Everyone is missing one or two things, but Samsung has all five of these.Just as ‘Intel Inside’ was on every computer in the past, they are dreaming of a world where it becomes ‘Samsung Inside’ when you open the hood, whether it’s a Hyundai or a BMW. It doesn’t matter who makes the shell of the car. The core is all Samsung.

4. A Move Bigger Than Parts: ‘Data Crude Oil’ and ‘Subscription Economy’

What Samsung is aiming for is not simply the margin left from selling parts. The real money is made after that.

[Data Sent by 75 Million Cameras]They say the oil of the 21st century is ‘data’, right? To complete autonomous driving, a massive amount of driving data is needed to teach AI.The reason Tesla is scary is because of the data sent by Tesla cars spread all over the world.But with this acquisition, Samsung has opened a pipeline to secure road data collected in real-time by 75 million cameras worldwide. As this data accumulates, Samsung’s AI will become insanely smart.

[Subscription Model with Monthly Income]You know that car features are subscribed to like Netflix these days, right? A certain amount per month to turn on autonomous driving, a certain amount for parking assistance.Even if only 10 million cars with Samsung parts exist, if they receive just 10,000 won per month, a structure is created where they sit and earn 1.2 trillion won a year. Parts are finished once sold, but services earn money until the car is scrapped.

5. Impact on Us and Risk Factors

What does this huge change mean for consumers and investors like us?

Consumer Perspective: Hyundai and Kia have no choice but to be nervous. A dinosaur possessing all the core point technologies has appeared right next door. If competition intensifies, car quality will likely go up and price bubbles will likely burst. It’s a benefit for us.
Investment Perspective: It’s a structure where work increases not just for Samsung Electronics but for the entire group, including Samsung SDI (Battery) and Samsung Electro-Mechanics (Camera Modules/MLCC). It is necessary to keep an eye on the entire value chain.

[Of course, there are risks too]

China’s Check: The low-price offensive from China (CATL, etc.) in the electric vehicle and battery market is fierce. There are also concerns about technology leaks.
Chemical Bonding: Grafting German corporate culture onto Samsung is not easy. Even with the Harman acquisition, it took several years to settle down.
Entry into Complete Cars: Although Samsung says “We don’t make cars,” since they have all the parts, they could make them anytime, right? Existing automakers might check Samsung while walking on eggshells.

In conclusion, Samsung is dreaming of a perfect revival not as a ‘company that makes cars’ but as a ‘company that is absolutely necessary as long as cars exist’, overcoming the pain of the automobile business failure in 1998. It is truly interesting to see how this winning move of buying 22 trillion won worth of value for 3 trillion won will change the global market.

< Summary >

Germany’s Fall, Samsung’s Rise: Amidst the crisis of the German automotive industry failing in software transition, Samsung acquired ZF’s core point business division (ADAS) for a bargain price (3 trillion won) as ZF fell into financial difficulty.
Securing Legal Necessities: The acquired camera/sensor business is mandatory safety equipment that must legally be installed when selling new cars in Europe/US (Global market share No. 1).
Completion of 5 Major Organs (Samsung Inside): Samsung has now become the only company to produce the Eye (Camera), Ear (Harman), Brain (Chip), Heart (Battery), and Memory (Memory) of a car, aiming to dominate the market without manufacturing finished cars.
Data & Subscription Economy: Beyond simple parts sales, aiming for continuous revenue generation through future software subscription models and securing AI training data through 75 million cameras on roads worldwide.
Outlook: Competition and cooperation with finished car makers like Hyundai Motor Company will accelerate, increasing consumer benefits, and a trickle-down effect is expected for the entire Samsung Group (SDI, Electro-Mechanics, etc.). However, China’s checks and organizational integration remain tasks to be solved.

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*Source: 꿀렁꿀렁 경제학

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