Samsung Electronics to Foster Non-Memory Sector as Growth Engine

Global semiconductor market shows signs of recovering from its worst recession

Samsung Electronics Semiconductor Division aims to post $16.6 billion for 2009 and $25.5 billion in sales in 2012, a 53.6 percent jump from this year. In particular, the Korean semiconductor giant plans to foster the non-memory sector as its next-generation growth engine on top of its leading share of the global memory market.
Samsung Electronics Semiconductor President Kwon Oh-hyun told reporters on Oct. 28, “The global semiconductor market posted negative growth during the period between 2008 and the first half of 2009, but showed signs of recovery starting the second half of this year, and DRAMs and Nand-type flash memory chips are likely to be in short supply next year.”
“Samsung Electronics will strive to achieve what it calls second renaissance by ramping up its technological leadership, implementing product differentiation strategies and securing unit price competitiveness,” he said.
The global semiconductor market suffered its worst recession ever during the period between the whole of 2008 and the first half of 2009. DRAM prices dropped below $1 by the end of last year, but began to climb this past July to the current $2.50. Nand-type flash memory chip prices lost around $2 in early 2009, but have since recovered to the current $6.
Prospects for the future market are bright. Kwon said, “The global semiconductor market is forecast to post an annual average growth of 11 percent after 2009, with memory chips in particular likely to grow an average of up to 16 percent per year.”
The PC and mobile phone industries, major consumers of semiconductors, began to show signs of recovery from the second half of this year after tiding over negative growth during 2008. The PC market is predicted to grow an average of 11.4 percent during 2009 and 2010, and it is forecast to make strides with an annual average of 15.4 percent during the period between 2011 and 2015. The mobile phone market is expected to grow an average of 8.3 percent in 2009 and 6.7 percent during the period between 2010 and 2011.
In this regard, Samsung Electronics said it plans to widen the technological gap between itself and other rival companies by stepping up its leadership in precision fabrication. Samsung Electronics plans to maintain a technological gap of one to 1.5 generations with its rivals in the DRAM sector and a gap of one to two quarters in the unveiling of Nand-type flash memory chips.
Samsung Electronics has a strategy to differentiate itself with others in terms of high-density, high-performance and low-electricity consumption chips. The Korean electronics maker has been placing advertisements in the U.S. edition of the Financial Times claiming that servers fitted with Samsung Electronics-made chips could save $2 billion per year. “The differentiated products account for 60 to 70 percent of total sales in the semiconductor field,” CEO Kwon said.
Kwon said Samsung Electronics has maintained the No. 1 position in the memory sector since 1993, and it plans to make another leap forward in the non-memory sector by fostering the sector as a next-generation growth engine. nw

Samsung Electronics Semiconductor President Kwon Oh-hyun