Samsung Leads Global Semiconductor Industry
- Achieves a feat: 110 tln won in sales and 29 tln won in net income


A look into the 30-year-old history of Samsung Electronics Co. indicates that of the local semiconductor industry. Samsung Electronics has raked 110 trillion won in sales in the semiconductor sector in the past 30 years and 29 trillion won in net income, contributing to driving the Korean economy.
The Korean electronics company has retained the No.1 position in the DRAM field for the 13th straight year and in the SRAM sector for the 10th straight year. The semiconductor sector has maintained the nation's No. 1 exporting item position with its percentage in the total exports surpassing the 10 percent mark. Samsung Electronics is projected to post 19 trillion won in sales in the semiconductor section and 7 trillion won in operating profits for 2004.
Hyundai Electronics and LG Semiconductor jumped on the bandwagon of Samsung Electronics into the semiconductor market in 1983 and 1989, respectively, raising Korea to a global "DRAM Powerhouse." Korea has a market-share of 43.8 percent in the global DRAM market and 33 percent in the global memory market. The domestic semiconductor industry serves as a buttress to prop up the sagging economy.
What's behind the success story of Samsung Electronics? An essential point in the success story is aggressive and rapid decision-making. Samsung Electronics was at a crossroads over where it would enter, the DRAM market or SRAM market. Samsung Electronics' initial decision to make a foray into the difficult yet large-size DRAM turned out to be a right conclusion. Semiconductor makers in Japan and the United States balked at investing trillions of won into producing 1-gaga DRAMs, which provided the late-comer Samsung Electronics with an opportunity to overtake front-runners in the semiconductor sector.
Secondly, Samsung Electronics has put more energy into securing talented manpower. A majority of the researchers involved in the production of Samsung Electronics' 16-mega DRAM studied overseas or were elite manpower recruited from foreign countries. The batch of researchers include Chin Dae-je, a former IBM researcher and now minister of information and telecommunication, Park Jong-woo, vice president in charge of the printer business, Hwang Chang-kyu, CEO-president of Samsung Electronics' Semiconductor Business, who worked for a researcher at Stanford University, and Kwon Oh-hyun, president in charge of Samsung Electronics' system LSI, who obtained a doctorate degree from the same university as CEO-president Hwang. They contributed to the successive development of updated DRAM versions.
What future prospects for the semiconductor industry? POSCO and Hyundai Heavy Industries have played leading roles in making strides in the local heavy industries, while Samsung Electronics and Hynix have initiated in nurturing the domestic high-tech, cutting-edge industries.
Samsung Electronics has managed to make a fast study of front-running companies, now has to make creative, new businesses. The semiconductor industry has undergone great changes: blurring the division between memory and non-memory sectors and the rising system-on-market (SoC) combining memory and non-memory semiconductors, helped by the strength of the digital market. The Korean semiconductor companies have a good job in the mass production and process technology in competition with rival companies, but they have to stage an uphill battle in overcoming new challenges in the non-memory sector.
Meanwhile, Samsung Electronics said recently it plans to invest 25 trillion won ($24 billion) in constructing new semiconductor production facilities with the goal of raising cumulative chip sales to 200 trillion won since its entry into the chip sector. Samsung Group Chairman Lee Kun-hee unveiled the plan at a meeting with Samsung Electronics executives, aimed at commemorating the 30th anniversary of its entry into the semiconductor market.
Samsung Electronics said it will also aim to take the world's top slot in five growth sectors - mobile processing units, display processing chips, C-MOS (complementary metal-oxide semiconductor) image sensors, memory chips for mobile equipment and integrated circuits - by 2007.
Hwang Chang-gyu, president of Samsung Electronics' chip division, projected the company's semiconductor sales to reach an all-time high this year with a 60 percent year-on-year increase. The company posted reported 17.9 trillion won in semiconductor sales last year.
At the ceremony Lee recalling that the management of Samsung Electronics once balked at its bid to jump into the semiconductor sector due to a lack of technology in the new field.
Samsung Electronics started its semiconductor business in 1974, then at the behest of Lee Byung-chul, Lee Kun-hee's father and Samsung founder, however, despite skepticism about the potential of the semiconductor market. nw