Samsung purchased Tel Aviv-based and privately held TransChip Israel Ltd. and turned it into one of its research and development centers, said Samsung spokeswoman Lee Eun-hee. The purchase took effect Oct. 1, she said.
The Korea Economic Daily newspaper reported Wednesday that Samsung paid US$70 million (€48.5 million) for TransChip. Lee said she could not disclose the purchase price.
Lee said Samsung bought TransChip "to enhance our competitiveness" in CMOS image sensors, which are incorporated into semiconductors used in digital cameras and cameras in mobile phones. Samsung manufactures the sensors.
TransChip would be renamed Samsung Semiconductor Israel R&D Center Ltd., Lee said. Samsung now has 17 research and development centers in countries including South Korea, India, China, Russia, the United States and Japan, she said.
It was Samsung's first acquisition since it paid US$20 million for the hardware systems business of U.S. entertainment software publisher 3DO Co. in April 1997, Lee said.
Suwon, South Korea-based Samsung is the world's largest manufacturer of computer memory chips. It also makes an array of components and consumer electronics, including liquid crystal displays, mobile phones, televisions, personal and laptop computers and digital music players.
Samsung's announcement of the acquisition comes after South Korean rival Hynix Semiconductor Inc. said earlier in October that it plans to re-enter non-memory chip production after a three-year hiatus to manufacture CMOS image sensors.
James Song, an analyst at Daewoo Securities Co. in Seoul, said that Samsung's move shows it was keen to strengthen competitiveness against mobile phone rivals including Nokia Corp., Motorola Inc., and LG Electronics Inc., especially in more expensive versions.
"The high-end handsets are more focused on the camera function," he said.
Samsung is the world's second-largest mobile phone manufacturer behind Nokia, having this year displaced Motorola for the No. 2 spot.
Separately, Samsung Vice Chairman Yun Jong-yong said Wednesday that the company is set to soon reach a sales milestone.
"This year we can see the achievement of US$100 billion (€69.2 billion) in sales for the first time since the company was established," he said.
Yun, who made the comment in a speech to commemorate the 38th anniversary of the company's founding, which falls Thursday, added that hitting such a sales figure shows that the company has risen to the ranks of top global corporations.
Samsung shares rose 1.1 percent to close at 550,000 won (US$611; €423) Wednesday.