Samsung's Own Way

Striving to be key developer of IT to rival Microsoft, IBM

Samsung Electronics Co. is a world-renowned company with its products sold around the world. But its phenomenal achievement has not come easy. It was the hard work put in by all levels of the company in the past several decades.
But to hear from Vice Chairman Yun Jong-yong, the giant electronics maker, which is often compared to Japan's Sony, in terms of its prestige around the world, has still a long way to go to sustain its strides, especially in the digital sector.
The company's chief executive wants his company to rival the likes of Microsoft and IBM as a key developer of information technology. By 2010, he thinks that the company should be able to achieve $170 billion in sales, double from $85 billion last year. Yun downplayed the company's achievement thus far by saying that it is just "a good company"but "we still have a lot of things to do before we are a great company."Yun claimed that his company is second to none when it comes to putting out goods.Yet in the Digital Age, Samsung still has many things to catch up with because mechanical parts are replaced by chips. He points to MP3 players as an example. Samsung produced the players two years before Apple did. But the U.S. company gave consumers the ultimate player iPod and, with the iTunes software and Web site, an easy way to fill it with music. It's time for Samsung to start developing similar products, the Samsung vice chairman said, which can better serve customers, adding that the company doesn't have the power to deliver total solutions.
How can Samsung be more innovative's One key initiative is the VIP Center. Yun set up the program in 1998 after concluding that as much as 80 percent of cost and quality is determined in the initial stages of product development. By bringing together everyone at the very beginning to thrash out differences, he believed, the company could streamline its operations and make better gadgets. In the past, two years, though, the center's primary aim has shifted to "creating new value for customers,"said Vice President Lee Dong-jin,
who heads the facility. The center is open 24 hours a day, located in Suwon, south of Seoul housed in a five-story former dormitory. It has 20 project rooms, 38 bedrooms for those who need to spend the night, a kitchen, a gym, traditional baths, and ping-pong and pool tables. Last year, some 2,000 employees cycled through, completing 90 projects with names such as Rainbow, Rapido and Rocky. Other products that have come out of the center include a notebook computer that doubles as a mobile TV, yet is thin and light enough to be carried in a handbag, and the ClP-500, a color laser printer that was built at the same cost as black-and-while model. While some teams wrap up their work within weeks, other projects drag on for months and all division leaders sign a pledge that participants won't return to their regular jobs until they have finished the project.
The Bordeuax team shows how the VIP Center operates. The goal was to create a flat-screen TV that would sell at least 1 million units. But the team members quickly discovered that they had strongly differing opinions about what consumers want in a TV. The designers came up with a sleek, heavily sculpted model. Engineers wanted to pack in plenty of functions and the best picture and sound quality. Product planners were concerned primarily with creating something that would beat the offerings of Sharp Corp., then the leader in LCD TVs.
Every step of the way, team members drew what Samsung calls "value curves."There are graphs that rank various attributes such as picture quality and design on a scale of 1 to 5, from outright bad to excellent. The graphs compared the proposed model with those of rival producers and Samsung's existing TVs. The VIP Center specialists also guided the team in discussions exploring ideas and concepts from entirely different industries, picking up hints about the importance of the emotional appeal in the offerings of furniture makers and Hollywood.
"We wanted a curve resembling a wine glass and a glossy back to make the TV fit in with other furniture,"said designer Lee Seung-ho, who worked on the Bordeaux project.
One challenge that the team had to deal with was the surveys showed that shoppers buy a flat-screen TV as much for its look as a piece of furniture as for its technological muscle. Some members went to furniture stores to figure out what made buyers tick, and discovered that the design of the set trumps most other considerations. So the group started shedding function in favor of form, cutting corners on high-tech features to spend more to make a TV that looks good even when it's turned off.
The control buttons were placed out of sight on the side, while speakers were tucked under the screen to create a sleek, minimalist front underlined by a flat, curving TV in blue or burgundy. The black and stand got the same high-gloss coating as the front. To keep costs down, Samsung removed a sensor that automatically adjusts the brightness to the light in the room and decided not to boost resolution to accommodate the latest high-definition standards. And with the speakers under the screen, the sound quality was lowered even as the TV's silhouette improved. "We tried to make sure consumers get maximum value for an affordable price,"said Kim Dong-jun, one of several senior managers at the VIP Center.
The initial response is encouraging. In the last week of May, Samsung overtook Sony to become the top seller of LCD TV brand in the U.S., cornering 26.4 percent market share in terms of value, compared with Sony's 24.6 percent and Sharp's 8.2 percent, according to researcher NPD Group. In January, the Korean electronics maker was No.3 with just 12.1 percent. Yun now wants Samsung to be the top maker of digital TVs, including those using plasma and rear-projection technologies, in the U.S. this year.
Yun sounds very ambitious. But he has a strong record of setting stretch goals and achieving them. Under his management, the company has been transformed to become the richest electronics maker in Asia. Now, it could also become the most inventive if Yun can reinvent Samsung one more time and get his engineers, designers and marketers to dream up products such as the Bordeuax and really fire consumers'imaginations.
Last June, a group of 11 Samsung employees pledged to do the last thing more people desire just as spring bursts into summer; stay inside a drab room with small, curtained windows for the bulk of the next six weeks. The product planners, designers, programmers, and engineers had recently entered Samsung's so called Value Innovation Program (VIP) Center, just south of Seoul. They were asked to outline the features and design of the company's mainstay flat-screen TV, code-named Bordeaux.
After an introductory ceremony attended by senior executives of Samsung's video division, the team joined a dozen or so similar groups at the VIP Center and got down to work.
The facility is a sort of a boiler room where people from across the company brainstorm day after day and often through the night. Guided by one of 50 "value innovation specialists,"they study what rivals are offering, examine endless data on suppliers, components, and costs, and argue over designs and technologies.
The Bordeaux team hammered out the basic look, feel, and features of the model by mid-August. Then over the next five months designers and engineers worked out the details, and by February the sets were rolling off the assembly lines. They hit stores in the U.S. and South Korea this April, starting at about $1,300 for a 26-inch set. "For the first time in our company, we developed a TV appealing to customers"lifestyles,'said Kim Min-sok, an official at Samsung's LCD TV Planning Group. nw

Samsung Electronics Vice Chairman
Yun Jong-yong.

SEC's Bordeaux digital TV, the top seller in the U.S. digital TV market with 23.9 percent market share to Sony's 17.7 percent.

Samsung Develops 2Gb Flash Memory,
Using 60-nanometer process

Samsung Electronics Co., Ltd., the world leader in advanced memory technology, has successfully developed a faster and higher capacity version of the world's fastest memory chip. ― OneNANDTM ― while applying 60nm technology to the chip's production process for greater manufacturing efficiency.
The new 2Gb OneNAND chip doubles the capacity of a OneNAND memory device (from 1Gb) and increases the chip's 'write'speed from 9.3MByte to 17MByte per second.
'We're seeing a rapidly widening market for our OneNAND memory because of its outstanding performance and capacity that has become even more noteworthy with the application of 60 nm technology,'said Don Barnetson, Director, Flash Marketing, Samsung Semiconductor.
Featuring NOR flash memory's fast 'read'speed and NAND flash's high-capacity plus fast 'write'speed, OneNAND holds enormous market potential in a wide range of applications from multimedia phones to digital cameras, removable memory cards, PCs and digital TVs.
Moreover, the chips can be interleaved to attain an even higher capacity, while allowing each chip to independently interact with the system. The more chips that are interconnected the more data that can be processed. For example, the 'OneNAND chip's write'capacity can be increased up to 136MByte per second when eight of the 2Gb memory chips are combined.
OneNAND memory can be used as buffer memory not only for 'writes'in the system by using faster-than-NAND 'write'speeds, but also as a buffer for high-performing 'read'operations.
Because of its exceptionally high performance, OneNAND can serve as a catalyst in the development of new product markets. A much-discussed example of this application-creating role is in how OneNAND memory is now being specified as the buffer memory inside a hybrid hard disk.
Samsung successfully demonstrated a commercial Hybrid-HDD prototype for the first time at the MS Developer Conference (WinHEC: Windows Hardware Engineering conference) in Seattle last month. nw