Samsung to Celebrate 40th Anniversary
Samsung Aims to Pass Over Siemens, Hewlett-Packard in Total Revenue
By Kim Yoo-chul
Staff Reporter
Samsung Electronics, Asia's most valuable technology company, will celebrate the 40th anniversary of its founding on Nov. 1.
Amid buoyant moves over its earnings, the Suwon, Gyeonggi Province-based technology giant is planning to announce a new vision, relating to fresh markets, including solar energy and bio-technology, according to Samsung executives.
"Samsung will announce a new and clearer business vision at the upcoming anniversary ceremony. The main focus will be how it nurtures and leads new markets," a senior executive told The Korea Times, Monday.
Samsung Electronics started business in 1969 with 36 staff members. This year, it is estimated to earn 130 trillion won in annual revenue, up 3.15 million-fold from 37 million won in its first year.
Operating profits for this year are expected to surpass 10 trillion won thanks to a massive turnaround in its key memory chip and LCD panel businesses, and strong demand for its TV and handsets.
Samsung now accounts for 14 percent of the total value of the South Korean stock market.
Representatives say Samsung is set for the role as a pathfinder in new markets and is forecast to overtake Hewlett-Packard of the United States and Siemens of Germany in terms of revenue within the next few years.
Humble Start
Samsung Electronics was initially just a small OEM-based local manufacturer, without any clear vision for its future.
But the business got bigger and bigger after it entered the chip-making sector in 1974 when it bought a bankrupt local semiconductor firm.
Ignited by an announcement by founding father Lee Byung-chull in Tokyo in 1983, Samsung injected the whole of its energy into the chip business.
But success was highly unlikely. Samsung was at least five years behind its Japanese rivals.
In the beginning, it bought semiconductor technology from Intel and Sharp, but executives have acknowledged that some of their advances were from "reverse engineering," the fruits of other companies' R&D efforts.
As the company played catch-up with its Japanese competitors, much of the technology came from engineers in rival U.S. companies who quietly moonlighted for Samsung.
At the same time, the company began luring home Korean-born engineers who were working in the United States, often using financial incentives provided by the South Korean government.
But the efforts finally paid off. By the end of 1983, it developed a 64Kb-based DRAM computer memory chip for the third time after the United States and Japan.
In 1994, Samsung developed the world's first 256-megabyte DRAM chip. The result was a massive cornerstone for its corporate name on the global market.
Samsung Electronics was ranked as the world's second-largest maker of semiconductors ― both memory and non-memory chips ― in 2003, up from fourth in 1999, according to Dataquest.
Thanks to steady technical breakthroughs and massive strategic investment programs, the South Korean firm has kept the lead in the global DRAM and NAND flash memory markets for over a decade.
Development Phase
Samsung's external growth has been expanded thanks to former group Chairman Lee Kun-hee's revolutionary management and production, through the principals he learned at U.S. and Japanese colleges.
Lee's management revolution began when he took his entire top management to Los Angeles, the United States, to show how American buyers seemed to be ignoring Samsung products.
Later, in 1993, Lee took all 850 of his senior executives to foreign cities, including Frankfurt, London and Osaka, in order to show them how badly the company's products were positioned.
The result was a series of intensive planning sessions intended to break up the provincial and inward looking corporate culture, and to hammer out a new approach to global business.
"Samsung's Anycall-branded mobile phone, which was introduced in 1994, and the digital television set in 1997, were more groundwork for the company to raise our global recognition," a Samsung executive said.
In 1998, the firm ranked as the world's No. 1 LCD panel maker, while it captured the top position in the global NAND flash memory market in 2004. In 2006, Samsung became the world's biggest maker of LCD TVs after passing Japan's Sony.
Samsung trails the industry leader Nokia in the global mobile phone market. For the time being, the company is turning itself into a "pathfinder" from a "fast-follower."
New Dream
After a humble start and painful growth, Samsung Electronics is set to lead new markets with its accumulated chip and flat-screen technologies.
On its strong showing in the global computer memory chip and flat-screen markets, Samsung is turning itself into a consumer-focused electronics giant focused on sustainable global leadership.
"Strengthened financial restructuring, a new profits-first scheme, streaming of the production and inventory system and diversification were the causes of the company's impressive reversal from red to black. Now we need more," the Samsung executive said.
In 1999, the year when Samsung marked its 30th anniversary, then CEO Yun Jong-jong declared a "New Millennium Vision" in order to prepare for the 21st century.
Under the plan, it aimed to make each of its four business divisions join the world's top three, while cutting its debt-to-equity ratio to less than 50 percent by 2005.
But Samsung insiders say that's history. They say that greater preparation for solar-related business and massive recent lunges toward LED TVs and AM OLED-embedded phones are the key points to read Samsung's next strategies.
Samsung began churning out LCD flat-screen TVs with LED backlighting since early this year, while it is also propelling its strategic touch-based smart phones equipped with the next-generation panel of AM OLEDs.
According to data from DisplaySearch, Samsung currently controls most of the global LED market. It is also on its way to increase sales of its AM OLED mobile phones, helped by the growing demand for much clearer images.
"Increased product portfolios, efforts for technology development and enhanced brand power in key items are helping us find the next growth fields. We are on target to overcome HP and Siemens in terms of total revenue," a Samsung representative said, asking not to be identified.