Samsung’s Harman to Buy ZF Group’s ADAS Unit in $1.8B Deal Reshaping Automotive Tech

Samsung Electronics’ automotive technology unit Harman will purchase the ADAS (advanced driver-assistance systems) business of the German automotive parts maker ZF Friedrichshafen for about $1.8 billion to strengthen its position in the area of automotive safety and automation technologies.

Through the trade, ZF will hand over its entire ADAS division, which manufactures and supplies the hardware and software needed for detecting objects, categorizing them, and making instantaneous decisions about their next movement, among other things, in vehicles. Such systems are essential for adaptive technology and will thus also have a significant share of power as not just future but also new features like lane-keeping assistance, and automated braking open up and quickly becoming standard in modern cars.

This is a big step for Samsung and Harman as it takes them from audio and infotainment to safety-critical automotive electronics. The acquisition of Harman by Samsung in 2017 for an estimated $8 billion deal, being mainly valued for its connected car and audio technology expertise, has helped to broaden its automotive business.

Harman through incorporation of ZF’s ADAS technology will have access cutting-edge camera systems, radar units, and driver-assistance software that are very important for next-gen autonomous driving platforms. These domains are among the high-growth areas within the automotive sector as stakeholders are getting more inclined toward higher levels of automation and safer vehicle systems.

The decision of ZF to divest its ADAS business reflecting a larger picture of corporate restructuring. The company financial performance is hampered by increasing debts and other industry pressures like slower growth in production of vehicles and investments in the green transition. The sale is anticipated to relieve some of the financial burden ZF is facing and enable it to redirect resources towards developing products in its core areas, which are driveline and chassis technology.

Around 3,750 employees from the ADAS department are expected to move to Harman, thus making sure that there will be no interruption for the customers and no stop in the development. This acquisition is a sign of the big industrial transition that is taking place and where the traditional automotive suppliers and technology companies collaborate or merge around the area of autonomous driving and safety systems. Samsung’s strong presence in the electronics and semiconductor industries gives it a strategic foothold in such a segment that is a little bit overlapping with its strengths in connectivity and computing.

For these car makers, the acquisition indicates that there is an increasing need for a comprehensive solution that covers all the stages from the sensing hardware through the AI-enabled decision logic and connected services. ADAS is today regarded as an indispensable technology feature linked with not only the safety regulations but also the consumers’ desire and expectation.

The acquisition is likely to be completed after the usual clearance from regulators and the fulfillment of the customary conditions. After it is completed, Harman will integrate the ADAS offering from ZF into its more comprehensive automotive systems strategy, whereas ZF will reassign the personnel to the product areas and technical goals that they have in the long term.

This deal is a clear indication of where the automotive industry is heading, i.e., towards the rapid evolution of technology, with boundaries among electronics, software, and mechanical systems getting increasingly blurred. The companies that will succeed in effectively integrating these areas will be the ones to take the lead in vehicle innovation’s next stage.

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