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Samsung Electronics and LG Electronics are anticipated to see blended ends in the automotive electronics enterprise, with main corporations asserting their ultimate third quarter outcomes this week.
LG Electronics’ Automobile Part Options (VS) division is predicted to put up income for 2 consecutive quarters after popping out of a protracted darkish deficit tunnel, whereas Samsung Electronics’ automotive electronics subsidiary Harman sees a marked enchancment from final yr’s degree. shouldn’t be anticipated.
In accordance with market analysis agency Technique Analytics, the worldwide automotive electronics market measurement is predicted to exceed US$400 billion in 2024 and over US$700 billion by 2028.
LG Electronics has invested greater than 4.5 trillion gained on this sector since 2015. However the outcomes weren’t passable until just lately. However issues began to vary from the second quarter of this yr, when the corporate managed to show a revenue for the primary time in 26 quarters since 2015. Its surplus is predicted to proceed within the third quarter. In accordance with LG Electronics’ provisional outcomes for the third quarter, the working revenue of the VS division is estimated to achieve Received 39-60 billion.
The division’s surplus is extra significant amid declining earnings for different divisions, together with the house leisure division (HE), in command of the TV enterprise. Business insiders estimate that the VS division’s efficiency will surpass 10 p.c of LG Electronics’ whole gross sales for the primary time this yr. Its annual working revenue is estimated to high 200 billion Received.
The division’s order stability is predicted to achieve $65 trillion by the top of the yr.
Samsung Electronics can also be engaged within the automotive electronics enterprise by means of Harman, which was acquired in 2017 for US$8 billion (Received 9.4 trillion). Harman’s working revenue stood at 205.3 billion gained within the first half of this yr. Its third quarter earnings are additionally anticipated to be virtually the identical as final yr. If this pattern continues, Harman’s earnings in 2022 are anticipated to be much like or lower than final yr’s annual working revenue of Received 599.1 billion. The decline in Harman’s profitability is attributed to a pointy enhance in manufacturing prices because of the Russo-Ukraine Struggle and logistical difficulties.
Consultants say Harman is failing to maintain tempo with Samsung Electronics. Despite the fact that it managed to attain working revenue of 599.1 billion gained in 2021, the best since its acquisition of Samsung, it by no means surpassed 2016’s working revenue of 680 billion gained.
Just lately, Samsung Group established a workforce associated to automotive electronics enterprise by means of Samsung World Analysis, a suppose tank and is recruiting analysis personnel for the workforce. The plan is to hunt synergies between related companions, together with Harman, Samsung Electro-Mechanics and Samsung SDI.
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