Samsung Electronics Case Study

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Strong growth over previous five decades; Logic chips for processing information/ information/ control processes, Memory chips - DRAM (Dynamic Random Access Memory), SRAM (Static















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DRAMs previously used in PCs – but share declined from 80% (1990) to 67% (2003). Telecom & consumer electronics became growing consumers of DRAMs.

















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TVs, set-top boxes, game devices (Playstation) 7% of global market in 2003;















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Market price conscious; Technology available with 2-3 main players;















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Microprocessor Microprocessor cost 4-12% of total PC cost, or 4-7% of mobile phone cost. Intense competition in market but 1% premium possible for quality















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Strength of Chinese competitors: Easy access to finance,















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Design blueprint > Transferred Transferred to mask; Silicon ingot diameter 12 inches (2005) > Cut into Wafers (250 –350 microns -















































































































































































































































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Samsung prided itself on the reliability of its products & ability to customize products.

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Back in 1980s & early 1990s: Samsung was producing poor quality products.

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1994: Lee‟s book delivered to all employees, explained how the Group















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By the late 1990s, Samsung was routinely winning key industry competitions for reliability and performance.

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Samsung developed new Flash















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Taboo at Samsung to ask a co-worker about his or her university or place of origin.

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Employees given aptitude test covering language skills, mathematical knowledge, reasoning & space perception.















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Hired westerners & other foreign talent.

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A corporate resource helped helped solve business problems at the business-unit level and prepared global managers for important positions.

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Chairman: “At Samsung, we reward















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2005: Chinese entrants attacking the DRAM market (the way Samsung did before);

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Companies in partnerships with Infineon & Elpida with billions of dollars in outside financing; Capacity to endure years of losses to gain significant market share;

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1. Fight Chinese competition in all

categories; 2. Collaborate actively with Chinese partner





























1. How did Samsung gain entry into the

semiconductor business? What strategy did the company adopt? a) Kun Hee Lee (the Chairman’s third son)















d) Samsung required outside technology –

found Micron to design/produce its first 64K DRAMs in the 1980s,















2. What design option did Samsung choose

for 4Mbit DRAM? Why? Was that a good decision? a) Kun Hee Lee chose the “stacking”



























































5. What strategy should Samsung adopt…

































































Samsung Electronics Case Study

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