Samsung Electronics should invest more, advance technology
Samsung Electronics proved the global competitiveness of its semiconductor business in the second quarter of the year. The company took back its position as the world's top chipmaker by surpassing Intel in both sales and operating profit from April to June. This was the first time since the fourth quarter of 2018 for Samsung to reclaim the global No. 1 spot, and can be attributed to the explosive demand for DRAM chips used in servers and personal computers amid a boom in contactless business caused by the prolonged COVID-19 pandemic.
The company also flaunted its technological competitiveness, dispelling concerns voiced by some local analysts. Among the world's top-three memory chipmakers, the company was the only one to achieve an operating profit ratio greater than 30 percent. Its operating profit to sales ratio rose to 30.47 percent, up a hefty 12.74 percentage points from the preceding quarter. SK hynix and Micron, the second- and third-largest makers, failed to reach the threshold. The difference was attributable to the gap in mass-production competitiveness, as Samsung focused on process efficiency while maximizing profit-improving effects, including cost cuts.
Samsung's remarkable performance was possible because it retained the competitiveness to turn abrupt changes resulting from the COVID-19 crisis into an opportunity. The opportunity will likely continue for the time being, but risk factors also remain formidable. Above all, Intel's counterattack will not be easy to repel. Under a new slogan, "IDM (Integrated Device Manufacturing) 2.0," the U.S. semiconductor giant has announced a plan to make massive investments into the foundry business, heralding a face-to-face confrontation with Samsung.
It will also be necessary for Samsung to dispel doubts about its future prospects. To do so, the company should maintain the maximum gap in technology with its competitors and make a bold move through timely and massive investments. However, Samsung Electronics' recent investment trend is far from the boldness of the past. Now that the company has confirmed that crises can be opportunities, it should bear in mind that failure to make the most of such an opportunity will always lead to the repetition of a crisis.
Samsung Electronics proved the global competitiveness of its semiconductor business in the second quarter of the year. The company took back its position as the world's top chipmaker by surpassing Intel in both sales and operating profit from April to June. This was the first time since the fourth quarter of 2018 for Samsung to reclaim the global No. 1 spot, and can be attributed to the explosive demand for DRAM chips used in servers and personal computers amid a boom in contactless business caused by the prolonged COVID-19 pandemic.
The company also flaunted its technological competitiveness, dispelling concerns voiced by some local analysts. Among the world's top-three memory chipmakers, the company was the only one to achieve an operating profit ratio greater than 30 percent. Its operating profit to sales ratio rose to 30.47 percent, up a hefty 12.74 percentage points from the preceding quarter. SK hynix and Micron, the second- and third-largest makers, failed to reach the threshold. The difference was attributable to the gap in mass-production competitiveness, as Samsung focused on process efficiency while maximizing profit-improving effects, including cost cuts.
Samsung's remarkable performance was possible because it retained the competitiveness to turn abrupt changes resulting from the COVID-19 crisis into an opportunity. The opportunity will likely continue for the time being, but risk factors also remain formidable. Above all, Intel's counterattack will not be easy to repel. Under a new slogan, "IDM (Integrated Device Manufacturing) 2.0," the U.S. semiconductor giant has announced a plan to make massive investments into the foundry business, heralding a face-to-face confrontation with Samsung.
It will also be necessary for Samsung to dispel doubts about its future prospects. To do so, the company should maintain the maximum gap in technology with its competitors and make a bold move through timely and massive investments. However, Samsung Electronics' recent investment trend is far from the boldness of the past. Now that the company has confirmed that crises can be opportunities, it should bear in mind that failure to make the most of such an opportunity will always lead to the repetition of a crisis.
![[ANALYSIS] Tesla, BYD's price cuts unnerve LGES, Samsung, SK](https://img.koreatimes.co.kr/upload/thumbnailV2/b1cf8ba68d474cb69352bfe7ea9d14f0.jpg/dims/resize/178/optimize)
![[INTERVIEW] How ATEEZ achieved worldwide success](https://img.koreatimes.co.kr/upload/thumbnailV2/c7723b56dde94eb4b260950d368fe8fb.jpg/dims/resize/178/optimize)
