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July 16, 2016

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Samsung talks to chip in for BYD

Source: Agencies | July 16, 2016, Saturday | Print Edition

SOUTH Korean technology giant Samsung Electronics Co yesterday said it is in talks to acquire a stake in Chinese automaker BYD to boost its chip business for electric cars.

In December, Samsung Electronics, the world’s top maker of smartphones and memory chips, created a team to develop automotive-related businesses, seeking a new growth engine as the global smartphone industry is slowing.

Automakers and technology companies have formed a series of partnerships in recent years as the race to develop electric, self-driving, Internet-connected vehicles has created demand for more electronics components and software.

“The latest investment aims at strengthening electric vehicle parts and smartphone parts businesses for the two companies,” Samsung said. “We plan to discuss cooperation in various businesses going forward.”

Samsung said it has not finalized how much it would spend to buy the stake, nor how big a holding it would take in BYD, which specializes in electric vehicles and is backed by Warren Buffett’s Berkshire Hathaway Inc.

The Korea Economic Daily reported earlier yesterday that Samsung agreed to buy new shares worth 3 billion yuan (US$449 million) in BYD, which would give Samsung a 4 percent stake in the automaker.

BYD confirmed in a stock exchange filing that Samsung Electronics had participated in their non-public issuance, but did not disclose the amount of its investment as the offering had yet to close. The automaker, however, denied Samsung Electronics would buy a 4 percent stake as reported in the Korea Economic Daily.

Samsung said the talks with BYD will not affect supply deals of its affiliate Samsung SDI, a lithium-ion battery supplier for electric vehicles.

BYD — the name stands for “Build Your Dreams” — started out as a battery developer, founded in 1995 by engineer Wang Chuanfu and 20 co-workers from a state-owned company. It grew to supply about half the global market for mobile phone batteries before expanding into electric vehicles with the 2002 purchase of a small producer of gasoline cars that became BYD Auto Ltd.

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