A unit of Samsung Electronics Co. bought a $449 million (3 billion yuan) stake in BYD Co., gaining a key access point to China's booming electric-vehicle market.

 

Samsung pursued a stake in BYD after an affiliate was among foreign battery makers left off a list of suppliers approved by China, where sales of EVs are surging.

 

The fundraising will dilute billionaire Chairman Wang Chuanfu's stake by about 1.9 percentage points to 18.8 percent.

 

Samsung pursued a stake in BYD after its affiliate was among foreign battery makers left off a list of suppliers approved by China, where sales of EVs are surging and the government has sped up construction of charging points.

 

The world's largest maker of phones and memory chips said earlier that investing in BYD would bolster Samsung's semiconductor business for cars.

 

BYD, which is backed by Warren Buffett's Berkshire Hathaway Inc., will use the proceeds from the placement to fund an expansion in battery production and research and development into new-energy vehicles, it said in the statement. China's government wants sales of EVs to exceed 3 million units a year by 2025, after surpassing the U.S. last year to become the global market leader.

 

Electronics makers such Samsung are vying for a slice of automotive sales as carmakers use more electronic sensors and displays in their push for more automated vehicles. For Samsung, the foray into the auto industry is also a way to help make up for declining growth in hardware businesses such as televisions and smartphones.

 

Samsung formed an alliance with Volkswagen AG's Audi unit to provide memory chips for the company's dashboard, infotainment and advanced driver assistance applications, the South Korea-based company said in November.