Samsung Electronics Case Summary Essay

Words: 1848
Pages: 8

Under Kun Hee Lee’s leadership Samsung has risen to become the world’s leading memory producer for all types of PCs, game players, digital cameras and other electronic equipments. In 1987, Samsung was a “bit player”, years behind its key Japanese rivals. In 2003 Samsung’s memory division is bigger than that of Japanese rivals in both size & profits. The memory chip industry was expected to face cyclical downturn in 2005 and Samsung survived two previous downturns still some outside believers believed that the Chinese entry would fundamentally change industry conditions in the years ahead.
There has been a strong growth in economic importance of Semiconductor industry over the previous five decades.
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Korea’s semiconductor industry started its wafer production in 1974. Kun Hee Lee, third son of Samsung Group’s founder Byung Chull Lee, bought Korea Semiconductor Company, using his own personal savings. Samsung Electronics was a producer of low-end consumer electronics goods. Kun Hee Lee merged the two companies to create global powerhouse. First semiconductor produced was the “watch chip,” used in wristwatches. From 1983 to 1985, even as global semiconductor market went into a recession & Intel left the DRAM business, Samsung allocated more than $100 million to DRAM development. At that time cost to produce 64K DRAM was $1.30, market price below $1.00. in mid 1980s Samsung built its first large manufacturing facility. To accomplish fast-paced construction, a target was set to build 4-kilometer road in 1 day to receive production equipment.
Kun Hee Lee was made Chairman when father retired. Since 1992, semiconductors had been South Korea’s largest export. In 2004, exports totaled to $25.1 billion that is 10.4% of the country’s export volume. Samsung Group exported 22% of Korea’s exports. Samsung Group represented 23% of total market value at the Korea Stock Exchange.
To design its first 64K DRAMs in 1980s with outside help the company found Micron in