Samsung Backs Innovation With $1.1 Billion

In a move to expand its research and development beyond its home country of South Korea, Samsung on Monday introduced its Strategy and Innovation Center (SSIC), a research and development group supporting the creation of novel technology for the company's Device Solutions business.

Based in Menlo Park, Calif., on Sand Hill Road, home to many storied venture capital firms, SSIC will be led by Young Sohn, president and chief strategy officer for Samsung's Digital Solutions group, and backed by the new $100 million Samsung Catalyst Fund and the pre-existing $1 billion Samsung Ventures America Fund.

"In many ways, much of our innovation in the past was done in [South] Korea," said Sohn. "That's where the company began and that's where a lot of our engineers were. Now more than half our employees work worldwide. We must reach out to hotspots that have the talent that is able to feel the touch of the disruptive innovation that's going on."

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One billion dollars, incidentally, represents the amount, more or less, that Apple was awarded last year in its patent infringement claim against Samsung. Apple accused Samsung of "slavishly" copying its technology and packaging. Samsung has appealed the verdict. And it is making a similar statement -- that it can innovate -- through this significant commitment to support technical research.

Though based in Menlo Park, SSIC will operate in multiple regions, described by Sohn as innovation hotspots. Its goal will be to promote innovation by providing funding for early stage ventures through Samsung's Catalyst Fund. It will focus on seed funding for research to improve the basic components used to develop products related to cloud infrastructure, mobile privacy, the Internet of things, human interface and mobile health.

At a media event in Menlo Park, Sohn elaborated on a global strategic vision he referred to as Samsung's global engine for innovation. Samsung is a huge company, with 227,000 employees around the world. It brought in over $188 billion in revenue last year across its nine business units -- visual display, mobile communications, digital appliances, network, printing and medical devices, digital imaging, memory, systems LSI and LED.

Samsung is interested in supporting technologies relevant to its three component business groups -- memory, system LSI, and LED. It hopes to advance technology in areas related to SSD, DRAM, SoC, CMOS, OLED and LCD components, among others.

"We want to make sure there's an opportunity to get started," said Sohn, in reference to academic research and entrepreneurs. He stressed that SSIC is not a startup incubator, but a way to support innovation that will ultimately benefit the Samsung platform.

Questioned about his use of the term platform -- typically used to refer to a software operating system that's open to third-party developers -- Sohn explained that by "platform" he means "brand." Samsung supports multiple operating systems across its various devices, he said, it does so because there's customer demand.

SSIC's goals will be further advanced by Samsung's Ventures America Fund, which provides financial support for more mature ventures. Based in Seoul, South Korea, with several offices in areas with an active technology industry, the fund manages over $1 billion in assets. It made 20 investments totaling $160 million in 2012.

Samsung intends to promote its Catalyst Fund with a competition, the SamsungCreate Challenge, later this year. The contest will award $10 million in seed funding to winners, chosen from among innovators who build something compelling that makes use of the Samsung Device Solutions Architecture Platform. Samsung says it will provide more details at a later date.