Keeps Going Strong
Samsung Electronics to ink supply contract
with Apple for NAND FLASH chips

"For the next 10 years at least, the exports of semiconductor chips will continue to be strong, especially, flash memory chips, which have been creating a rush for IT firms around the world to buy them from Korea,"claimed Hwang Chang-kyu, president of Samsung Electronics Semiconductor Division. He made the remark at the breakfast meeting of CEOs provided by the Korea International Trade Association Nov.15.
"Chips making is the only technology that Korean can dominate the world market with,"the Samsung official went on to remark. He said such renowned IT makers as Apple and Sony have been asking for more NAND FLASH memory chips to Samsung, but the company can only meet 50 percent of their requests, adding that the shortage will continue to exist for some time in the future.
He pointed out three major reasons for the worldwide demand for Samsung chips. Steve Jobs, a stubborn chairman of Apple, finally gave up and decided to use Samsung chips in his company's MP3 players's i-Pod Nano. The Nokia chairman asked for Samsung chips, specially made for his company's cell phones. Microsoft decided to use Samsung chips in its next-generation games, following a long-drawn out price talks with the Korean chip maker.
Only three years ago, Japan's Toshiba had a 50 percent share of the NAND FLASH chip market in the world, with Samsung only taking 25 percent. But the situation has been reversed now with Samsung taking over 50 percent of the market, and Toshiba's reduced to 25 percent. Hwang said Samsung chairman Lee Kun-hee rejected Toshiba's proposal for a joint research of semiconductor chips with Samsung and Samsung's success today is owed to its decision to go on its own in chip technology research. Toshiba, in fact, is able to turn out fusion chips, combining the capacities of D-Ram, S-Ram, flash memory, and logic chips, from next year due to the transfer of technology from Samsung.
Hwang said Samsung is set to launch the sale of its notebook computers equipped with flash memory chips from this month is owed to its technology for flash memory chips. He said the people thought he was crazy when he predicted in 2002 that 20 GB chips will soon be introduced and the prediction has turned out to be true. Now, he said the chip is used in a variety of equipment including camcorder 8GB, MP3 player 4GB, notebook PC 2 GB, USB memory 2GB, playstation 1GB, smartphone 1 GB. He again predicted that 50 GB will be introduced next year. 50 GB memory chip can store all the articles in newspapers published in 310 years, and MP3 with 12,500 songs.
He recalled that every body thought Samsung would not be able to make a go of its chip business when it took over Hankook Semiconductor 30 years ago, specially its Japanese rivals who had drinks over Samsung's bad fortune. Hwang stressed that Samsung introduced its 256 MD chips for the first time in the world on Aug.29 in 1994, which was made possible due to hard work put in by every one concerned and it came blissfully on the anniversary day of shame for Korea, the day the country became a Japanese colony. When Samsung Chairman Lee asked him when Samsung would be ahead of Japanese chipmakers in 2001, Hwang told him to wait for another year and in 2002, Samsung's share of the world NAND FLASH chip market registered 50 percent, beating Toshiba.
Samsung agreed to provide oneNAND production technology to Toshiba from next year and operate a joint production unit. The Korean company will not receive royalty for the technology from its Japanese rival due to the cross licensing agreement signed in 2002, but it will see a substantial part of the royalty paid to Toshiba for NAND FLASH chip technology.
The top manager for the chip operation for Samsung said Apple Computer of the United States will announce its deal with Samsung on its purchase of oneNAND chips for its MP3 players. He said other chip makers such as Toshiba and Hynix would also sign supply contracts with Apple. Samsung supplied 40 percent of its production of NAND FLASH chips to Apple in the third quarter. nw

A chart showing the development of NAND FLASH chip by years