Samsung Electronics and Harman are entering the audio semiconductor market. Samsung Electronics' strategy is to collaborate with Harman, which has influence in the electric parts and audio equipment market, to vertically integrate and create audio semiconductors as a new revenue source.
According to industry sources on the 18th, Harman's Korean subsidiary recently formed a team of domestic semiconductor design experts. The company plans to collaborate with Samsung Electronics System LSI division to develop various audio chips. The company is already in the process of purchasing major design IPs from Hi-Fi digital signal processing (DSP) design asset (IP) companies for audio.
An industry official explained, "In the beginning, Harman will receive subcontracts for audio chip design from Samsung Electronics’ System LSI division."
That is, Harman will act as a design house for audio semiconductors. A design house refers to the industry that receives design codes from semiconductor designing companies and is in charge of producing and testing masks that will be used in the production process in accordance with foundry processing technology. Samsung Electronics will own all of these audio semiconductor technology assets. Experts explain, however, that Harman can design a variety of audio-related chips in the future if the business grows.
When audio semiconductors are produced in cooperation with Samsung Electronics and Harman, the products will be mounted on Samsung mobile devices, household appliances, and Harman's audio equipment, to achieve vertical integration. In particular, Harman's strong business, automotive infotainment system, can be integrated with Samsung's application processor (AP) or other audio semiconductors. Samsung Electronics is actively targeting the automotive semiconductor market.
Currently, Samsung's non-memory major products are application processors (AP), communication modem chip solution, display driver IC (DDI), CMOS image sensors (CIS), and power management semiconductors (PMIC). The addition of audio semiconductors will expand the flagship product portfolio.
In November of 2016, Samsung Electronics acquired Harman USA for $8 billion to strengthen its audio business and boost its automotive electronic device department.