Samsung Electro-Mechanics Co., Ltd. Withdraws Completely from Motor Business

Samsung Electro-Mechanics Co., Ltd. got rid of all of its motor businesses.

Its strategy is to get rid of all minor businesses that have low profitability and focus on major businesses including camera module business. All of its process of getting rid of minor businesses was finished around end of last year, and Samsung Electro-Mechanics Co., Ltd. has been operating a new business system on full-scale starting from this year.

According to an industry on the 11th, Samsung Electro-Mechanics Co., Ltd. had sold tangible and intangible assets from its motor business last year and completely withdrew from all businesses that were related to motor business. Samsung Electro-Mechanics Co., Ltd. had been developing and manufacturing spindle motors that go into HDD (Hard-Disk Drive) and vibration motors such as linear actuator that usually goes into mobile devices and coin-type brushless DC motor. It decided to get rid of spindle motor business and vibration motor business in June and October of last year respectively.

Samsung Electro-Mechanics Co., Ltd. sold spindle motor business to its partner called Nedec. It decided to stop selling spindle motors and sell its assets in June and finished all procedures in December by selling its factories in Thailand. It transferred its vibration motor business to Mplus that was newly established in December and divided its internal business department.

Employees from Samsung Electro-Mechanics Co., Ltd. had moved to Mplus. Wisol, which is a partner of Mplus, has 68% of Mplus’s shares and rest of shares was divided among former executives and employees from Samsung Electro-Mechanics Co., Ltd. Currently all procedures regarding sales of vibration motor business department are finished.

By selling both businesses, there aren’t any businesses related to motor remaining in Samsung Electro-Mechanics Co., Ltd. Samsung Electro-Mechanics Co., Ltd. used to manage motor businesses for small and medium-sized parts through spindle motors, vibration motors, and stepping motors. Vibration motor, which was recently liquidated, is a part that causes vibration within a mobile device and is also a major part that causes Haptic vibration when a display is touched.

“By selling vibration motor business at the end of last year, Samsung Electro-Mechanics Co., Ltd. completely withdrew from motor business.” said a representative for an industry. “Samsung Electro-Mechanics Co., Ltd. decided to sell and transfer these businesses to small businesses that are able to produce efficiently and reduce cost since these motor businesses have low profits for a huge corporation like Samsung Electro-Mechanics Co., Ltd. and have low chances of inducing technical investments.”

This move is part of Samsung Group’s reorganization process that is getting rid of minor businesses. In July of last year, power, tuner, and ESL (Electronic Shelf Label) businesses were also transferred to SoluM, which is a corporate body that was newly established. Samsung Group got rid of businesses that have low profitability and have chances of having lower profitability in the future.

Samsung Electro-Mechanics Co., Ltd. thought that motors for HDD have low profitability and growth due to emergence of SSD (Solid State Drive) and dominance by Japan’s Nidec. Although vibration motor market’s forecast is bright, Samsung Electro-Mechanics Co., Ltd. was worried that its competitive edge would worsen as vibration motor business is a minor business out of company’s entire businesses.

“Samsung Electro-Mechanics Co., Ltd. believed that motor businesses have relatively low added values and that it could lose its competitive edge since they are labor-intensive businesses.” said a representative for Samsung Electro-Mechanics Co., Ltd. “Since Samsung Electro-Mechanics Co., Ltd. finished all procedures of getting rid of minor businesses to focus on major businesses, there won’t be any big changes in businesses for a while.”

Staff Reporter Song, Junyoung | [email protected]