Samsung Electro-Mechanics CEO Kye Hyun Kyung was instrumental in Chemtronics being chosen as the preferred bidder for the company’s wireless telecommunication module business, TheElec has learned.
Kyung has considered the synergy between the business and those of the supplier’s after the purchase is complete, people familiar with the matter said. The CEO believed Chemtronics was ahead of its rivals in this matter, they said.
Chemtronics started its autonomous driving business in 2014 and is also conducing a national project on the development of cooperative-intelligent transport systems (C-ITS).
Samsung believed its wireless telecommunication module would have synergy with Chemtronics’ vehicle-to-everything (V2X) technology.
Prior to being name preferred bidder, Chemtronics was considered unlikely to be chosen as a bidder as it has already acquired Samsung Electro-Mechanics’ wireless charging module business last year. Chemtronics have paid the acquisition price of 21 billion won in installments, raising worries whether it can buy the wireless telecommunication module business. Chemtronics reportedly said it would pay 150 billion won, like its rival bidder.
Chemtronics is expecting double digit operating margin from the wireless telecommunication module business. It will have less fixed cost compared to Samsung Electro-Mechanics. Samsung Electronics has designated the chip to use for the modules for Samsung Electro-Mechanics, making profitability difficult.
Chemtronics is also the OEM for Samsung Electronics’ 60-inch range Samsung Flip interactive display. This is expected to help the company post 1 trillion won in sales next year.
Samsung Electro-Mechanics is to begin its survey of Chemtronics before the sales go ahead. Chemtronics is planing to lower the price by 10 billion won to 140 billion during this process, people familiar with the matter said.
Meanwhile, Samsung Electro-Mechanics is planning to exit the rigid flexible printed circuit board business as well, a matter that CEO Kyung is also overseeing. The firm planned to exit within the year but this was delayed to the first half of 2021 due to relationship with customers. The business is thought to have posted 400 billion won in sales and 50 billion won in loss annually.