Former rivals join hands amid uncertainties

From left, Hyundai Motor Group Executive Chair Chung Euisun, Samsung Electronics Executive Chairman Lee Jae-yong and LG Group Chairman Koo Kwang-mo attend the Bureau International des Expositions (BIE) General Assembly in Paris, June 20, as they visited the French capital to support Korean city of Busan’s bid to host the World Expo 2030. Joint Press Corps

Samsung, Hyundai Motor, LG and other conglomerates that have been fierce rivals are increasingly collaborating to achieve growth in areas where they can do better together than alone, such as AI, future cars and electric vehicle (EV) batteries, according to industry officials.

Those conglomerates have been fierce rivals over the years, competing in various industrial sectors, such as semiconductors, automobiles and electronics. However, they are now trying to become more competitive by combining their capabilities as the boundaries between sectors blur and merge.

“Domestically and internationally, there are growing economic uncertainties. In this situation, it seems that major Korean companies that were previously competitors are judging that it is more advantageous to create synergies through collaboration,” an industry official said on condition of anonymity.

Seen is Samsung SDI’s P6 battery for electric cars. Samsung SDI said on Oct. 23 that it signed a contract to supply the P6 battery to Hyundai Motor’s next-generation EVs that will be sold in Europe from 2026 to 2032. Courtesy of Samsung SDI

On Oct. 23, Samsung SDI, a battery unit of Samsung Group, signed a contract to supply its latest P6 batteries to Hyundai Motor’s next-generation EVs that will be sold in Europe from 2026 to 2032. The P6 is a high-capacity battery that can power an EV about 700 kilometers on a single charge.

This is the first time that Samsung SDI and Hyundai Motor have signed a supply contract in the field of EV batteries.

The collaboration between Samsung and Hyundai Motor groups is a major change, as the two conglomerates have been known to be rivals for a long time. In fact, Lee Jae-yong, executive chairman of Samsung Electronics and de facto leader of Samsung Group, and Chung Euisun, executive chair of Hyundai Motor Group, announced at an event at Samsung SDI’s Cheonan plant in May 2020 that they would join forces, and the results of that meeting have come to fruition three years later.

Samsung and Hyundai said that the contract would allow Samsung SDI to have Hyundai Motor as a new customer and secure additional growth momentum, adding that they will continue their collaboration, including the development of next-generation battery platforms.

"We have taken the first step in a strategic collaboration with Hyundai Motor, which is leading the global automotive industry,” Samsung SDI CEO Choi Yoon-ho said. "We will do our best to strengthen Hyundai Motor's leadership in the global EV market by expanding long-term collaboration with our technological competitiveness and the best quality."

Hyundai Motor Group is also collaborating with SK On, a battery cell subsidiary of SK Group, to construct a joint battery plant in the U.S.

An infotainment system is installed in a Genesis GV80 SUV run by LG Electronics’ automotive webOS. LG Electronics said on Nov. 1 that it supplied its in-vehicle operating system software to Hyundai Motor Group’s car brands, including Hyundai Motor, Kia and Genesis. The company said the infotainment system can also display YouTube. Courtesy of LG Electronics

On Nov. 1, LG Electronics said it supplied its webOS Auto, an operating system for in-vehicle infotainment, to Genesis GV80 SUVs. Genesis is Hyundai Motor Group’s luxury car brand.

“The new Genesis GV80 models are equipped with LG’s new infotainment system, enabling them to experience through webOS Auto a variety of content they used to enjoy on mobile devices or TV,” LG said. “Watching YouTube and online streaming content in the driver’s seat, passenger seat and rear seat is available in accordance with driving safety regulations.”

In the electronics industry, Samsung and LG are realizing unprecedented collaboration as Samsung Electronics began using LG Display’s OLED panels for its TVs starting this year. The two have been arch rivals in various IT businesses, such as home appliances, mobile phones and chips as well as in emerging sectors such as batteries and automotive electronics.

Regarding why past rivals are now working together, another industry official added that there are no permanent enemies in business, and that the current owners of family-controlled conglomerates are not limited to domestic rivals but have spread to the world, so they are not hesitant to collaborate if it is mutually beneficial.

"There are attempts to resolve the competition with Chinese companies, which are rapidly catching up, and the development of new businesses through collaborations between Korean companies. This is because it is more profitable to collaborate on the parts that each company does well than the old business model of trying to do everything on their own." the official said asking not to be named.