Key Takeaways
1. Significant Meeting: Samsung’s Chairman Jay Y. Lee and Xiaomi’s CEO Lei Jun met for the first time in seven years, signaling potential collaboration in the electric vehicle market.
2. Xiaomi’s EV Ambitions: Xiaomi sold 137,000 units of its SU7 electric vehicle in its first year, with plans to increase production to 350,000 vehicles by 2025 and expand globally by 2027.
3. Existing Supplier Relationship: Xiaomi already relies on Samsung for various components in smartphones, providing a strong foundation for potential collaboration in the electric vehicle sector.
4. Samsung’s Strategic Shift: Samsung may benefit from diversifying into the electric vehicle supply chain, especially as it faces challenges in its semiconductor business.
5. Potential for Unusual Alliances: The meeting suggests that unexpected partnerships between competitors could emerge in the growing $800 billion electric vehicle market.
Samsung Electronics Chairman Jay Y. Lee recently met with Xiaomi’s CEO, Lei Jun, at Xiaomi’s electric vehicle factory in Beijing. This meeting is crucial as it might change the electric vehicle supply chain landscape. It’s also the first time in seven years that these two technology leaders have come together, indicating possible collaboration between these smartphone competitors in the growing electric vehicle market.
Xiaomi’s Electric Vehicle Growth
Xiaomi is rapidly pursuing its electric vehicle goals. In its first year, the company sold 137,000 units of the SU7, bringing in $4.5 billion in revenue. They aim to increase production to 350,000 vehicles by 2025 and expand globally by 2027. This swift growth creates a strong need for components, an area where Samsung shines, providing advanced batteries through Samsung SDI, automotive displays, AI chips, and infotainment systems from Harman International.
Potential for Collaboration
Analysts in the industry believe that the meeting between the two CEOs went beyond just initial talks, considering the location and the seniority of those involved. Both companies have already established a solid supplier relationship, with Xiaomi relying on Samsung for memory chips, NAND flash storage, and OLED displays for their smartphones. This existing connection could serve as a solid base for collaboration in the electric vehicle sector.
Samsung’s Strategic Shift
Diving into the EV supply chain could benefit Samsung, especially as the South Korean firm has encountered difficulties in its core semiconductor segment. For example, they struggled to deliver the Exynos 2300 and Exynos 2500 chips on schedule, while Google reverted to TSMC for producing the Tensor G5. Therefore, branching out into automotive supply chains might offer Samsung some much-needed stability. Their affiliate companies supply nearly 60% of the components required for modern electric vehicles, making them a suitable partner for Xiaomi’s ambitious production goals.
While there are no confirmed specifics regarding collaboration, the high-profile meeting hints that formal announcements might be on the way. Such a partnership would be unusual as it represents a cooperation between competitors in the smartphone market. It highlights how the $800 billion electric vehicle market is fostering unexpected alliances in both tech and automotive sectors.
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