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Samsung Confirms It Will Not Make Electric Cars

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Samsung offers various products and services peripheral to the automotive industry. It makes automotive processors, in-car infotainment systems, EV (electric vehicle) batteries, and digital car keys. No wonder there were rumors of the company making its own car as well. Electric cars, to be specific. But the Korean behemoth has reportedly confirmed that it has no such plans. We won’t see a Samsung-branded EV for the foreseeable future.

Citing two senior Samsung executives directly involved in the matter, The Korea Times reports that the company decided against making electric cars because it doesn’t believe the segment will see sustainable profits.

Additionally, Samsung already supplies various components to existing EV manufacturers. The company entering the market itself may lead to a conflict of interest. The Korean firm wants to avoid that too. It doesn’t want to compete directly against its customers and be involved in a situation similar to the patent litigation battle with Apple that lasted for more than ten years.

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“After thorough reviews, responses, and discussions with clients, top Samsung management reached a consensus that making a foray into the finished EV segment won’t be the right fit both in terms of a profit standpoint and from a client management perspective,” the sources told the publication.

Samsung would remain a component supplier to electric car manufacturers

Samsung says perfection in terms of design and quality is key to success in the EV segment. The company believes it still has a lot of work to do in the design area. This will cost a lot and the Korean firm sees it as an “unguaranteed value”. There’s no point in entering a business where there’s no clear path to profitability.

Instead, Samsung feels supplying components to EV manufacturers would be more profitable for it. This way, it will also remain safe from any possible conflicts with its existing clients. According to the source, the company “acknowledges that maintaining high-level alliances and partnerships with clients will be more substantial than advancing into business segments, which could hurt the best interests of the corporate clients.”

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As the new report notes, Samsung is betting on improved profitability from the foundry business. There have been issues here as well, but the semiconductor division is still the company’s most profitable business. It is now preparing to introduce the industry-leading 3nm GAAFET (Gate-All-Around Field Effect Transistor) technology later this year. The Korean behemoth would be hoping the new chip tech to help it win back some of the clients it recently lost due to various issues.