The famous Korean tech company Samsung has big intentions to advance its technological capabilities in 2024, according to reports.
In order to improve its current operations and find new sources of development, the company is searching for significant mergers and acquisitions (M&A) transactions. This follows a miserable fiscal year in 2023, during which its profit fell by 85% compared to 2022.
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Samsung faced a tough year in 2023
Financially speaking, Samsung had a terrible 2023 as its profit fell by an astounding 85% from 2022. It is projected that the Korean tech giant earned only $5 billion in revenue last year, its lowest profit margin since 2008. The COVID-19 epidemic, the worldwide lack of chips, and the intense competition from Chinese competitors were the primary causes of this decrease.
About half of Samsung’s revenue comes from its smartphone division, which saw a 23% decline in sales in 2023. Sales of its television and household appliances decreased by 12% and 9%, respectively. The company’s semiconductor division was the sole bright light; it expanded by 8% as a result of the high demand for memory chips.
Staffs encouraged to be flexible, creative
Samsung’s co-CEOs, Han Jong-hee and Kyung Kye-hyun, urged staff members to pursue excellence while maintaining flexibility in this rapidly changing technology industry, despite the difficult circumstances. They claimed it’s the only way to increase market competition in a message sent out last week on the start of the new year.
Han recently continued by providing details on Samsung’s long-term goals. During a press conference held on the fringes of CES 2024, taking place in Las Vegas right now, he stated that the company is looking into M&A transactions as a means of fortifying and expanding its operations. “We’ve been steadily on M&A deals to strengthen our existing businesses and discover future growth engines,” Han stated.
Samsung hopes to close significant M&A acquisition this year
Han, who also serves as Vice Chairman of the company and is in charge of its network, appliances, visual display, and mobile experience divisions, also mentioned that the company hopes to close an M&A deal this year. Last year, the US-based OLED microdisplay company eMagin was bought by the IT giant. The music streaming service Roon, which supports many rooms and devices, was purchased by its audio company Harman.
It does seem to be searching for a larger acquisition this year, though. Maybe something like Harman’s $8 billion megaacquisition in 2017. Samsung has already made tiny investments in over 260 startup enterprises during the past three years alone. Its investments have come in the domains of AI (artificial intelligence), digital health, finance, robotics, and electronics, according to a new article from The Korean Herald.
The Korean humanoid robots company Rainbow robots is one of Samsung’s possible targets. Han disclosed in March of last year that Samsung was in talks with the business to acquire it. The corporations might still be in talks, even though there hasn’t been any news about it as of yet. Samsung is the second-largest shareholder in Rainbow Robotics with a 14.83% stake in the company. Maybe the current recession slowed down the negotiations.
“We have worked very hard, consistently identifying and evaluating companies as M&A targets, even in the face of a number of unfavorable deal-making circumstances, such as the COVID-19 pandemic, geopolitical unrest, and the worldwide economic recession,” Han stated. Whether Samsung can land a significant merger or acquisition this year is still up in the air. The business intends to enhance its market performance gradually starting in 2024.
Other possible customers might Samsung target
Other possible targets for Samsung include: NXP: An organization with headquarters in the Netherlands that focuses on infotainment systems and automotive application processors.
TI: A Texas-based business well-known for producing high-voltage chips, which are necessary for chips used in automobiles.
GlobalFoundries: A US-based company that is one of the largest chip foundries in the world, and which could assist Samsung in expanding its foundry capacity and infrastructure.
Renesas: A Japanese company that is among the leaders in the micro control unit market, another crucial area in the automotive chip field.
To strengthen its position as a leader in technology in 2024, Samsung may be interested in hiring some of these individuals. Nevertheless, neither Samsung nor any of these businesses have made any formal announcement regarding any ongoing M&A discussions.