Samsung Electronics Co. has created a $300 million fund targeting new investments for automotive software and technology, the latest sign of the world's largest smartphone maker's desire to diversify beyond traditional electronics.
Samsung said Thursday that it had secured the first investment from the automotive-innovation fund, spending EUR75 million ($89 million) to create a strategic partnership with TTTech, a company that specializes in safeguarding the real-time computer systems used in connected cars. Audi AG is also a major investor in the Austria-based TTTech.
Continue Reading Below
The South Korean technology giant has identified the automotive sector as a critical area for growth, as cars are increasingly outfitted with multimedia platforms and high-tech software--a potential windfall for Samsung's displays and semiconductor businesses.
Samsung has been accelerating investments and other efforts into the automotive space over the past year, following last year's announcement of an $8 billion deal to buy U.S. auto-parts supplier Harman International Industries Inc. Since then, Samsung has won regulatory approval in South Korea and California to test cars using its self-driving technology on public roads.
Like many of its Silicon Valley peers, Samsung doesn't plan to manufacture its own vehicles but sees vast potential to create autonomous-driving software it could one day sell to traditional car makers. Samsung's tests in South Korea install its deep-learning algorithms and other software onto a vehicle made by Hyundai Motor Co.
The $300 million investment, called the Samsung Automotive Innovation Fund, will target bets on smart sensors, machine vision and artificial intelligence that get used by connected cars, the company said. The firm is "excited to play a leadership role in supporting and shaping the future of smarter, more connected vehicles," said Young Sohn, a chief strategy officer at Samsung Electronics, in a statement.
The fund also serves as a statement that Samsung plans to continue making new investments following last month's conviction of the company's de facto leader, Lee Jae-yong. A Seoul court sentenced Mr. Lee, the company's vice chairman and the Samsung heir, to five years in prison for bribing South Korea's former president. Mr. Lee's lawyers have filed an appeal contesting the court verdict.
Three days after Mr. Lee's conviction, Samsung announced a fresh $2.3 billion investment in semiconductors. Chips and auto technology are areas Mr. Lee has signed off on as pillars for Samsung's direction.
Beyond Harman, Samsung has other auto-tech bets on several startups that focus on automated driving, sensors or high-performance computing.
Write to Timothy W. Martin at email@example.com
(END) Dow Jones Newswires
September 14, 2017 05:16 ET (09:16 GMT)
Continue Reading Below