Samsung Group’s solar business may go dark
Samsung Group is reportedly considering shutting down its solar energy business, one of the five major new growth strategies that were supposed to secure the Korean conglomerate’s future.
Instead, Samsung is stepping up its mobile solution businesses, including the Internet of Things (IoT).
According to industry sources, Samsung has been reviewing its solar energy business, where profits have been shrinking even though renewable energy, particularly solar, is considered a lucrative market.
A report last year by Frost & Sullivan, a market research company, estimated the global solar power market last year at $59.84 billion and predicted it to double to $137.02 billion in 2020.
The report projected global solar photovoltaic (PV) demand this year would be dominated by the Asia-Pacific region, which accounts for roughly 46 percent of installed solar PV capacity. China, Japan, India and Australia are expected drive regional demand.
Despite such a promising outlook, Samsung SDI in the second quarter reported that its electronics material division, which includes its solar energy business, suffered a 15 percent year-on-year drop in revenue to 365.9 billion won ($342.5 million). The company in the first quarter reported it spent 17 billion won on solar energy research and development, 22 percent less than a year earlier.
Samsung Fine Chemicals in May reduced its stake in SMP, a joint-venture polysilicon plant with SunEdison, from 53.7 percent to 16.1 percent. The biggest reason for the falling profit was competition from Chinese companies.
The solar business was one of five new growth engines - along with automotive batteries, LED, biotechnology and advanced medical equipment - that Samsung announced in 2010 would be its focus, unveiling a plan to invest a total of 23.3 trillion won in the five sectors by 2020.
It had planned to align affiliates with the solar energy business. Samsung Fine Chemicals was to develop polysilicon, while Samsung SDI was to develop solar cells and modules. Samsung Everland was supposed to construct a plant that would be managed by Samsung C&T.
Instead, since the second half of this year Samsung has been ramping up its business in mobile solutions, which includes mobile pay, smart homes and business-to-business (B2B) operations.
Samsung promoted smart homes during the IFA consumer electronics show held in Berlin last month, while holding various software and IoT forums.
BY LEE HO-JEONG [email@example.com]
with the Korea JoongAng Daily
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