Samsung Electronics Case Summary
SAMSUNG ELECTRONICS SUMMARY
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. Semiconductor products were classified into two categories; Logic chips and memory chips. Logic chips were used for processing information/ control processes whereas Memory chips were further classified into DRAM (Dynamic Random Access Memory), SRAM (Static RAM), & Flash to store information. The case is focused on Global memory chip industry.
DRAMs captured over half of the memory chip market in 2003. DRAMs were previously used in PCs, but their share declined from 80% to 67% between 1990 and 2003. Telecom & consumer electronics were growing consumers of DRAMs in 2003. Communications products were expected to grow from 3.5% to 7.9% in 2008 while TVs, set-top boxes, game devices such as Play station represented 7% of global market in 2003. In 2003, SRAM, a type of buffer memory which facilitated computer processing & mobile phone functionality, accounted for 10% of the industry sales and Flash memory, used in heavy digital cameras & mobile phones, is a hot growth area and account for 32% of the industry sales.
The memory industry contained powerful suppliers and price conscious customers. Over time technology grew more complex and suppliers became more concentrated. Only 2-3 main players dominated the key segments of
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. Semiconductor products were classified into two categories; Logic chips and memory chips. Logic chips were used for processing information/ control processes whereas Memory chips were further classified into DRAM (Dynamic Random Access Memory), SRAM (Static RAM), & Flash to store information. The case is focused on Global memory chip industry.
DRAMs captured over half of the memory chip market in 2003. DRAMs were previously used in PCs, but their share declined from 80% to 67% between 1990 and 2003. Telecom & consumer electronics were growing consumers of DRAMs in 2003. Communications products were expected to grow from 3.5% to 7.9% in 2008 while TVs, set-top boxes, game devices such as Play station represented 7% of global market in 2003. In 2003, SRAM, a type of buffer memory which facilitated computer processing & mobile phone functionality, accounted for 10% of the industry sales and Flash memory, used in heavy digital cameras & mobile phones, is a hot growth area and account for 32% of the industry sales.
The memory industry contained powerful suppliers and price conscious customers. Over time technology grew more complex and suppliers became more concentrated. Only 2-3 main players dominated the key segments of