By on July 21, 2016

BYD

As the saying goes, if you can’t sign a supply agreement with ’em, buy a part of ’em.

That’s clearly not a saying, but that’s what Samsung Electronics Company just did with Chinese electric automaker BYD, handing over $440 million deal for a 1.9 percent stake in the company. According to Bloomberg, a Samsung subsidiary was turned down by China as an approved supplier of batteries to the automaker, so the electronics giant tried another door.

When it announced its intention to buy a stake in BYD earlier this week, Samsung claimed it wanted a new market for its semiconductor technology. Connected, electric vehicles need a pile of chips to make the magic happen, and Samsung wants a slice of the growth market.

BYD, backed by Warren Buffett’s Berkshire Hathaway Inc., is a big player in China’s emerging electric car market. When Samsung’s Shanghai Samsung Semiconductor was left off a list of approved foreign battery suppliers, it took out its wallet and bought 52.3 million shares in BYD.

According to the automaker, money raised through the share buy will go towards battery production and research and development into electric vehicles. In turn, that means more vehicles for Samsung to tap for its chip sales. China wants its government-spurred EV sales to top three million units a year by 2025.

Samsung formed its own automobile offshoot, Samsung Motors, in 1994, but the automaker has since become a subsidiary of Renault. The tech company is trying to diversify its revenue sources now that the smartphone market has cooled down.

[Image: Claudio Núñez/Flickr]

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4 Comments on “Samsung Buys Stake in Chinese Automaker After Being Turned Down as a Supplier...”


  • avatar
    Chocolatedeath

    Wow is that company really worth that much. $440 million deal for a 1.9 percent stake. Did not realize it.

  • avatar
    mchan1

    “China wants its government-spurred EV sales to top three million units a year by 2025.”

    Basically explains it as no company can ever beat the Communist Chinese government when it wants something done!
    Any company that thinks it can actually do business in China may as well bend over and become a plaything to the Chinese regime.

    • 0 avatar
      Von

      “Any company that thinks it can actually do business in China may as well bend over and become a plaything to the Chinese regime.”

      A lot of them do, fueled by the temptation of a large market, and CEO compensation structures that favor short term gains.

      • 0 avatar
        runs_on_h8raide

        Careful good Von, sir….some people on this site actually believe in capitalism’s “efficient” use of resources/capital!!! LMAO! LULZ!!! and EHRMAGHAD!!!

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