Samsung leans toward local component suppliers in China
In order to regain share in the Chinese smartphone market, Samsung Electronics (005930.KS) is said to be stepping up its component procurement from local suppliers. In particular, BYD Electronic (285.HK), a spin off of BYD Co. (1211.HK), a Shenzhen based automotive and component supplier whose lead company investor is Berkshire Hathaway (BRK). BYD Electronic has received an order for high-end smartphones from Samsung, according to Taiwan press, and Samsung has been courting a number of other Chinese component suppliers, with O-film Technology (002456.CH), Holitech Technology (002217.CH), Truly Opto (732.HK), and BYD’s ODM division.
We note that back in July 2016, Samsung invested $450m in BYD Co., supposedly under the concept of a way for Samsung to improve its automotive semiconductor results, but BYD will use the capital to expand its battery production and for R&D toward ‘new-energy’ vehicles. The relationship between the two obviously is broader than just the automotive market as Samsung broadens its touch with BYD in order to lower the cost of assembly on the Chinese mainland. The new relationship is said to be replacing some existing component suppliers in Taiwan, but we cannot point to specifics at this time.
We note that back in July 2016, Samsung invested $450m in BYD Co., supposedly under the concept of a way for Samsung to improve its automotive semiconductor results, but BYD will use the capital to expand its battery production and for R&D toward ‘new-energy’ vehicles. The relationship between the two obviously is broader than just the automotive market as Samsung broadens its touch with BYD in order to lower the cost of assembly on the Chinese mainland. The new relationship is said to be replacing some existing component suppliers in Taiwan, but we cannot point to specifics at this time.
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