Samsung Still Keeps Dominance in TVs, Chips
By Kim Yoo-chul
Staff Reporter
Uncertainties were unexpectedly high in Samsung Electronics’ global TV and semiconductor businesses, in which the South Korean technology has the competitive edge on its rivals.
In an apparent move to regain the past glory, Japan’s Sony has been making efforts to cut the prices of its liquid crystal display (LCD) TVs in the highly-competitive North American market, while Samsung is countering the pressure in the second quarter with a flood of investments in memory chips ― 7.3 trillion won amid the red alert in the global chip industry.
But Samsung, the world’s biggest LCD TV and memory chip maker, is still holding its dominance in both segments mainly due to its rock-bottom pricing.
According to the recent data from DisplaySearch, a U.S.-based market research firm, Samsung was found to have recaptured a top ranking in the North American LCD TV market from Sony with a 12.8 percent market share in terms of units in the first three months of this year. iSuppli also says Samsung took 30.6 percent of global share in chips.
``While rivals suffered from huge losses and falling profits, we will not change the current strategy to implement aggressive investment plans and the faster migration into advanced chips,’’ a Samsung spokesperson said Sunday.
The company reaped a 4 percent operating margin in the chip business in the quarter, which is much better than the chaser Hynix Semiconductor’s 30 percent operating loss over the same period.
``We are engaged in a very tight race with Vizio and Sony in the North American LCD TV market. However, what’s impressive is that we still have price edges there, because price-cutting has made other competitors such as Philips and Sharp struggle in their TV business,’’ the spokesperson said.
Experts generally agree it is unlikely that Samsung might lose its current leadership in chips though signs of ``consolidation’’ between chipmakers have been gaining momentum.
According to the data from DRAMeXchange, the contract price of the industry’s benchmark 512Mb DRAM chips increased to $1.08 per unit, while the average price of branded 1Gb chips shot up 11.3 percent to $2.16 from $1.91 in the quarter.
Earlier, Samsung forecast a 100 percent jump in DRAM bit shipment and 130 percent for NAND flash memories, citing increasing demand for technology gadgets.
On Thursday, Hynix said it will buy a maximum 10 percent stake in its Taipei-based ally ProMOS and agreed with the strategic partner to transfer its distinctive 50-nanometer level processing technology in a move to offset falling profits with more cost-cuts through the expansion of foundry (contract) business.
Japan’s Elpida is also solidifying its partnership with Powerchip and German-based Qimonda for the development of more advanced chips, while Micron Technology of the United States follows the similar steps with Taiwanese Nanya Technologies for R&D and foundry business.
Hynix took up 18.6 percent of global share, while Elpida and Micron follows with 14.5 percent and 11.4 percent, respectively, in the first quarter of this year, iSuppli said.
``For me, the possibility of Samsung’s acquisition of Infineon is not groundless, though Samsung officially denied the possibility,’’ the analyst said, adding that time is ripe for the chip leader to act decisively.
``Samsung has been expanding the pie and maintaining the current leadership in TVs and chips with massive investments.’’