Social Responsibility News

SAMSUNG Electronics Acquires Semiconductor Division of 3DO

May 02, 1997

- A new company is established in the United States to bolster the non-memory business of Samsung Electronics. - Next-generation multimedia processor to be developed for DVDs. -Groundwork laid for major advance into non-memory sector.

Seoul, Korea, May 2, 1997: Samsung Electronics Co. Ltd. signed a contract on April 29 to purchase the Hardware Division of 3DO Company, a US concern that is world famous for games, and which possesses some of the best graphics technology in the business. At the same time, Samsung Electronics announced an agreement to establish a new company called Advanced Graphics Technology (AGT).

With this acquisition, Samsung gains patents and technology for 3DO`s MPEG II, which features outstanding picture quality, as well as MX, with Dolby Pro-logic AC-3 functions. Samsung Electronics plans to fuse this technology with its own digital video disk (DVD) system know-how to develop a DVD processor for next-generation video systems and computer support devices.

The technology and engineers from 3DO will be joined with multimedia signal processor R&D people from the company`s local subsidiary Samsung Semiconductor Incorporated to establish AGT in California`s Silicon Valley. The new company, will be independently operated by locally-hired management, and plans call for it to go public within three years of its establishment. Samsung Electronics is scheduled to supply AGT with wafers.

AGT will begin with an invested capital of $25 million, and its first task will be to develop the new DVD processor. Samsung Electronics will have the intellectual rights to the DVD processor, while AGT will be licensed for the same technology so that it can develop different applied products.

The contract between Samsung Electronics and 3DO has been under negotiation since the end of last year. The two parties came to a mutually-beneficial agreement. Samsung Electronics has needed core software functions and systems for developing multimedia chips, while 3DO has wanted to focus its business on developing (software) titles for (electronic) games.

Samsung Electronics` System LSI Division was restructured early this year to strengthen Samsung Electronics` non-memory business lines, and the new management approach is behind this latest acquisition with much support. The new company, combined with the CPU |(Alpha chip) developed by Samsung Electronics last October, is seen as opening a new chapter in the creation of system-on-chip devices.

Samsung Electronics has also secured the core technology and local personnel, who are well experienced in independent development projects to develop multimedia signal processors.

Samsung Electronics Company Ltd., a US$ 19 billion flagship company of Korean based Samsung Group, is a world leader in electronics, with operations in more than 60 countries. The company develops, manufactures, and markets consumer electronics, industrial electronics and semiconductors.