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ED Sustaining technological lead

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Korean businesses worry about survival, not growth

“To survive, technology comes first, second, and third,” Samsung Electronics Vice Chairman Lee Jae-yong said last Saturday, returning from his 12-day European tour. Stressing the importance of technology, Lee also said, “Our job is to bring talented people and create a flexible corporate culture.” The top manager of the world's largest memory chip maker thus reaffirmed that securing a core workforce and technological leadership is the only way to survive the global competition.

Samsung Electronics is now experiencing difficulties maintaining a technological lead over foreign rivals. As a result, the company's stock price, which it once dreamed of breaking the 100,000 won ($77.30) level, tumbled to 58,700 won Monday. In the non-memory chip sector, which accounts for 70 percent of the semiconductor market, Samsung falls far behind Taiwan's TSMC. On the other hand, latecomer Intel, jointly with a Dutch partner, is closely chasing Samsung by successfully introducing extreme ultraviolet exposure equipment essential for the ultra-fine process.

There seems to be no end to its external risks, as seen by Russia's weaponization of rare gases such as neon and argon, core materials of semiconductors. Against this backdrop, Samsung Electronics recently announced a 450 trillion won investment plan for future growth engines, including the biotech and IT sectors, over the next five years. That also came far later than the moves of its major foreign competitors, who have been showing massive M&A activities over the past few years. Nevertheless, Lee, bound by judicial risks and weekly court hearings at home, renewed his resolve, saying, “We will put our life on the line.”

Still, the domestic environment appears unfavorable for Samsung and other companies. However loudly the business community complains about the shortage of technicians and regulatory traps, politicians and bureaucrats have even tightened regulations and created an uneven playing field. In the meantime, governments in foreign countries have taken the lead in helping corporations strengthen their competitiveness, secure a talented workforce and enjoy tax benefits. Unless our country gets down to business, it can quickly fall behind in this era of widening technology gaps.