By Kim Tae-gyu
Staff Reporter
Over the past few years, Samsung Electronics President Hwang Chang-gyu was a star businessman at the South Korea's foremost company by any measure.
As a head of the Seoul-based company's cash cow semiconductor division, Hwang made Samsung the runaway leader in the memory chip markets.
Since he took the reins of the semiconductor unit in 2000, Hwang also channeled much efforts and funds to claim technical leadership on the global scene.
Based on such performances, Hwang was touted throughout last year as one of the strongest candidates to take the throne of Asia's most valuable technology company. Samsung is composed of five divisions including cell phones and displays.
However, every flow has its ebb and Hwang's kingdom has been shaken this year for some reason.
First and foremost, prices of memory chips plummeted earlier this year, substantially chipping away at the bottom line of the semiconductor unit.
Possibly due to the deteriorating profitability, Samsung assigned a subdivision focusing on memory chips to Executive Vice President Cho Soo-in last month, Hwang's underling. Thus far, Hwang himself has taken charge of the subunit.
Hwang's troubles seemed to come to an end of late as the prices of Samsung's two flagship items _ dynamic random access memory (D-RAM) and NAND flash memory _ recovered.
But more bad news hit Samsung and Hwang late last week when some of its chip production lines near Seoul were halted due to power outage.
``To be sure, Hwang has suffered setbacks several times this year for some reason. Maybe he faces the toughest times,'' Mirae Asset analyst Kim Kyung-mo said.
``It remains to be seen how Hwang will tackle the problems. This is a crucial time for him,'' he said.
Born in 1953 in Busan, Korea's second-largest city, Hwang could recognize the potential of semiconductors in 1974 when he was a junior at Seoul National University.
As a major of electronic engineering, he accidentally read a paper on semiconductors written by Andy Grove, a co-founder of the world's top chipmaker Intel.
In interviews with media outlets, Hwang said the paper, titled Physics and Technology of Semiconductor Device, made him decide to study semiconductors.
``I recognized all science and engineering studies are incorporated into a nail-sized chip,'' Hwang said.
Inspired by the Grove paper, which Hwang read hundreds of times, he crossed the Pacific in 1981 to delve into semiconductor technologies at the University of Massachusetts.
Samsung hired Hwang in 1989, who back then was a researcher at Stanford University. In January 2000, 11 years after getting aboard Samsung, Hwang took the helm of the firm's semiconductor unit.
Since then, Hwang has made the semiconductor segment the most lucrative business at Samsung. In 2004, the unit alone posted an operating profit of 7.8 trillion won.
On top of the stellar performances, Hwang established technical authority with a prediction in 2002 that the density of the top-of-the-line flash memory chips will double every 12 months.
Compared to the famous Moore's Law, which says the processing power of the state-of-the-art chips will double every 18 months, the hypothesis is often called Hwang's Law.
And Hwang himself, who gained the honorable moniker of ``Mr. Chip'' thanks to his contribution in the semiconductor business both at home and abroad, proved the assumption.
Samsung doubled the density of its top-line flash memory from 256 Megabit (Mb) in 1999 to 512MB in 2000, 1Gb in 2001, 2Gb in 2002, 4Gb in 2003, 8Gb in 2004, 16Gb in 2005.
In defiance of the general belief that further progresses would take more time, Samsung unveiled the 32Gb product last year with an innovative technology, dubbed charge trap flash (CTF).
``The new CTF technology will expand the life span of NAND flash well beyond today's level, allowing for greater product miniaturization and greater economies of scale in the production of consumer electronics,'' Hwang said.
NAND flash is the memory chip that emerges as the mainstream data storage device in almost all digital cameras, MP3 players and latest cell phones based on its characteristics of fast-read access time and solid-state shock resistance.
After culminating in 2004, the operating profit headed south to 5.4 trillion won in 2005 and 5.2 trillion won the next year. But the figures were still impressive.
A sign of crisis surfaced this year with the prices of D-RAM and NAND flash plunging.
In the first quarter, the semiconductor division recorded a mere 540 billion won in operating profit and the figure further fell to 330 billion won over the three months ended June 30.
This means that Hwang's division chalked up a mere 870 billion won in operating income in the first half and is on track to reach 1.7 trillion won for the full year 2007.
Midway through last month, Samsung undercut Hwang's toehold more by doling out the important subdivision on memory chips to one of his men, Executive Vice President Cho.
And the unprecedented accident broke out late last week, adding salt to the wound of Hwang.
A total of six chip production lines situated in Giheung, Gyeonggi Province, were shut down last Friday afternoon when a power system exploded.
The lines resumed normal operations in approximately 22 hours at Saturday noon, and Samsung said the damages will be less than 40 billion won.
But the accident tainted the image of Samsung as well as Hwang, who had boasted of state-of-the-art facilities in its production lines.
``Currently, Hwang's status is not as solid as the past. A year ago, he was god in our division. But now he seems to be a human just as we are,'' said a Samsung insider, who declined to be named.
``But his technical knowledge is still unrivalled. We need to see how he will get back on track again down the road,'' he said.