Samsung Electro-Mechanics, the electric modules and components arm of South Korea’s Samsung Group, may dispose of its WiFi module division as part of restructuring efforts aimed at offloading non-core assets.
The company has started a review of the business and it may be offloaded to a supplier to ensure an onward relationship, industry sources said on Friday (October 16). Suppliers would be interested in strengthening their links with the firm.
“A WiFi module is one of the technologies that are common in the industry,” an industry insider said. “A potential buyer would be more interested in larger orders (from Samsung Electro-Mechanics).”
In April 2019, Samsung Electro-Mechanics sold its wireless charging business and near-field communication business to WiTS, a subsidiary of the company’s supplier Chemtronics, for 21 billion won ($18.4 million).
Chemtronics experienced top-line growth of over 32% after its acquisition, with revenue jumping to 225.2 billion won on a consolidated basis at the end of June, up from 170.4 billion won in the same period a year earlier. Most of the increase came from WiTS.
The price tag for the WiFi module unit is expected to be about 150 billion won. The sale of the unit would allow Samsung Electro-Mechanics to further focus on 5G and multilayer ceramic capacitor (MLCC) businesses, industry watchers said.
“MLCCs are a key component, not only for home appliances but future technologies such as electric vehicles,” another industry insider said. “The MLCC business is expected to capitalize on the growing electric vehicle market.”
A Samsung Electro-Mechanics representative said that “nothing has been decided yet” on the WiFi module. “The sale, if it is executed, would have little impact on the company’s operations because of its small portion.” (Reporting by Seon-young Kim)