Samsung Electronics’ push to build a “two-track value chain” in Germany is gaining speed. It is using Germany as a strategic bridgehead at the intersection of two megatrends: the shift to software-defined vehicles (SDVs) and the expansion of AI infrastructure.
The first track runs from semiconductor manufacturing to automotive chips and automotive electronic systems. The second track links semiconductor manufacturing to AI servers and data centre cooling, and both are moving in parallel.
Samsung Electronics’ Device Solutions (DS) division recently supplied its in-vehicle infotainment (IVI) processor, the Exynos Auto V720, to BMW for its new New iX3. It was the first mass-produced model using BMW’s next-generation electrification platform, the Neue Klasse, to choose a Samsung Electronics chip.
The Exynos Auto V920, based on a 5-nanometre process, will be used in BMW’s 7 Series in the future. The Exynos Auto V920 is a deca-core processor equipped with 10 of British chip designer Arm’s latest automotive CPUs. Compared with existing products, CPU performance improves 1.7 times, GPU performance doubles and AI computing performance rises 2.7 times. It supports high-performance, low-power LPDDR5, enabling simultaneous control of up to 6 high-resolution displays and 12 camera sensors.
Earlier, Harman, a Samsung Electronics subsidiary, acquired German supplier ZF’s ADAS business division for 2.6 trillion won. ZF is the top company in the ADAS smart camera market. It was a large-scale acquisition in the automotive electronics sector carried out 8 years after Samsung Electronics acquired Harman in 2017.
Christian Sobottka, Harman’s CEO, said: “We have secured a strategic foothold to supply centralised integrated controllers in the automotive electronics market, which is at a technological inflection point where digital cockpits and ADAS are integrated.” Along with ADAS, the centralised controller segment Sobottka highlighted is a high-growth market expected to post average annual growth of 12 percent. The market is projected to expand to 189.3 trillion won in 2035 from 62.6 trillion won in 2025.
Centralised controllers can update software functions over the air (OTA) and are seen as a core technology in the SDV era. Since Samsung Electronics acquired Harman in 2017, revenue has doubled to 14.3 trillion won in 2024 from 7.1 trillion won, suggesting a bet on long-term market growth. Samsung Electronics has set a goal of generating at least $20 billion in revenue from its automotive electronics and audio businesses by 2030.
Germany is also serving as a base for its AI data centre cooling business. Samsung Electronics completed the acquisition of Germany’s FlaktGroup in November last year. Founded in 1909, Flakt is Europe’s largest air-conditioning equipment company. It has more than 60 years of experience in data centre cooling. FlaktGroup CEO David Doni said in an interview with the company newsroom: “Since presenting our first computer room air-conditioning unit in 1964, we have provided related solutions for more than 60 years.”
Flakt has about 10 production bases globally and sales networks in Europe, the Americas, the Middle East and Asia. It is also participating in the Stargate programme, a global project to build hyperscale AI infrastructure. Samsung Electronics’ strategy is to combine Flakt’s high-precision HVAC control system with its own AI-based building integrated control platform to target the next-generation data centre market.
Earlier, Roh Tae-moon, head of Samsung Electronics’ DX division, described the link, saying: “The Flakt acquisition is a strategic decision for Samsung Electronics to lead the global HVAC market and provide innovative solutions to customers.” He added: “We will combine Flakt’s technological capabilities with Samsung Electronics’ AI platform to move forward as an industry-leading company in the global HVAC market.”
Samsung secures SDV, AI growth engines in Germany
Samsung Electronics’ series of acquisitions in Germany is leading to synergy across its business divisions. Its semiconductor competitiveness is linking to automotive chip supplies and expanding into integrated automotive electronic systems.
In April 2024, Samsung Electronics Chairman Lee Jae-yong visited German optics company Zeiss to explore cooperation on advanced semiconductor manufacturing equipment. Zeiss is the sole supplier of the optical system, a key component of extreme ultraviolet (EUV) lithography equipment. Strengthening semiconductor manufacturing competitiveness completes a virtuous cycle that connects to supplies of automotive chips and semiconductors for AI servers.
At the same time, as AI computing demand surges and data centre cooling demand increases, the HVAC business has also entered a growth track. An integrated solution combining Flakt’s coolant distribution unit (CDU) technology and Samsung’s modular chiller was supplied to a U.S. aerospace customer, delivering its first result.
The two-track value chain built through acquisitions, cooperation and product supplies in Germany is expected to become a core part of Samsung Electronics’ strategy to secure future growth engines. With SDV and AI operating in parallel, it has laid the groundwork for a shift from a simple parts supplier to an integrated solution provider.
Samsung Electronics expanded from digital cockpits to ADAS through Harman, and broadened its portfolio from air cooling to liquid cooling for data centres through Flakt. An industry official said: “Samsung has secured integrated solution capabilities needed for the SDV and AI era by linking semiconductors, automotive electronics and HVAC in Germany.” The official added: “It has gained competitiveness that encompasses the entire system beyond simply supplying parts.”