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[KH explains] With the Rainbow stake, is Samsung’s robotics ambition taking shape?

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Samsung Electronics recently acquired a substantial stake in Rainbow Robotics, a local humanoid robotics company, for 47 million won. This provides a glimpse into the robotics ambitions of the South Korean tech giant, which remain a mystery.

Samsung became the second-largest shareholder of Rainbow Robotics when it acquired approximately 1.94 million shares earlier this month. Rainbow Robotics is one of a small number of companies that produce bipedal humanoid robots. The robotics company’s stock rose by more than 30% following the news.

They took over Rainbow Robotics’ stakes. During a press conference that took place last week on the sidelines of the Consumer Electronics Show in Las Vegas, Samsung’s co-CEO Han Jong-hee stated, “There’s nothing more than that.”

“It is true that robotics is one of the factors driving our future growth. This year, a humanoid assistant robot called EX1 will make its debut.

Industry observers are keeping a close eye on the recent stake purchase. Samsung to secure an early advantage in the burgeoning robotics market although the CEO of Samsung declined to put too much emphasis on it.

Two-legged humanoid robots are regarded as technology companies’ ultimate key growth drivers, surpassing service robots on wheels. On condition of anonymity, a source in the industry who is familiar with the stake purchase stated, “Samsung has taken a step to become the first mover.”

Even for Samsung, building robots from scratch is complicated. It would be preferable to collaborate with a reputable robotics company rather than wasting money on its establishment.

The source added that Rainbow Robotics makes over 90% of its robot parts in-house, which would help Samsung make robots for less money.

According to Eugene Securities analyst Yang Seung-yoon, Rainbow Robotics “is likely to produce robots specifically designed for Samsung, from service robots and four- or two-legged humanoids to home robots” using its advanced technology.

He particularly placed high hopes on the synergy between Samsung’s high level of software. Artificial intelligence prowess and the sophisticated hardware technology of Rainbow Robotics.

“It might be premature to say, but Samsung-Rainbow Robotics and Hyundai Motor Group-Boston Dynamics could compete head-to-head. Their rivalry could assist in industry expansion and encourage innovation, he added.

In a major push for the robotics industry, the South Korean automaker purchased Boston Dynamics, best known for its four-legged robot dog “Spot,” in 2021 for 1 trillion won.

Samsung has introduced prototypes of housekeeping and service robots, as well as wearable robots that assist disabled people, although it has not yet introduced any advanced robot products.

Robotics has also caught the attention of Chairman Lee Jae-Yong of Samsung Electronics. He pledged in October 2021 to invest 240 trillion won in robotics and other futuristic technologies.

Rainbow Robotics is looking to expand its presence in international markets. So joining forces with Samsung is likely to be advantageous for the company as well. The company intends to enter the United States and Europe this year.

The analyst, Yang, stated, “Backed by Samsung, Rainbow Robotics is likely to receive positive feedback from foreign investors.”

A group of researchers from the Korea Advanced Institute of Science and Technology Humanoid Robot Research Center established Rainbow Robotics in 2011. In February 2021, the company listed its first stock on the nation’s tech-heavy Kosdaq.

The expansion of the company’s business in service robots, such as those used in factories and restaurants, was largely responsible for the company’s first profit in the third quarter. During the quarter, it generated 10.4 billion won in sales and 140 million won in operating profits.

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