Samsung, "Investing 25 Trillion Won in Semiconductors"

Samsung Group aims to achieve cumulative sales of 200 trillion won in its semiconductor business by investing an additional 25 trillion won from 2005 to 2010.

In line with the 30th anniversary of Samsung’s semiconductor business on Monday, Samsung held a strategic meeting on semiconductors in Hwaseong, Gyeonggi-do, and came up with a long-term strategy to further cement Samsung’s position as the world’s leading company. Chairman Lee Gun-hee, Samsung Electronics Vice Chairman Yun Jong-yong, and Samsung’s semiconductor business President and CEO Hwang Chang-gyu attended the meeting.

Dr. Hwang reported at the meeting that Samsung Electronics is expected to see a 60 percent increase in sales year-on-year.

The IC Insight, a semiconductor market research firm, prospects that Samsung Electronics will record $16 billion in sales, up from $10.4 billion in 2003.

Since the world’s top chipmaker Intel is expected to see $30 billion in sales, up from last year’s $27 billion, the gap between the two firms has narrowed.

“The focus of the IT industry is rapidly shifting to mobile products, therefore we will strengthen the synergy between memory and non-memory products in the memory business,” said Dr. Hwang.

He added that Samsung would push its five core mobile products to the world’s top spot by 2007: mobile CPU, mobile memory, display driver chip, image sensor, and chip card IC.

He also said that Samsung would invest an additional 25 trillion won in semiconductors for six years starting next year, thereby creating approximately 10,000 new jobs.

“Investing in advance is the key to semiconductors since the opportunity loss will be huge if we lose the chance,” said Chairman Lee Gun-hee, emphasizing his view that the semiconductor business is all about timing.

The chairman poured his money to take over near-bankrupt Korea Semiconductor Co. in 1974 when he was a director of Tong Yang Broadcasting Company, which was an affiliate of Samsung. Initially, the company made IC for wristwatches, a transistor for black-and-white TVs, and IC for color TVs.

The late Lee Byeong-cheol, the founder of Samsung, provided a turning point by announcing Samsung Group’s advancement into the semiconductor industry in 1983, and started developing 64K DRAM technology.

Dr. Hwang attracted worldwide attention in 2002 when he announced “The New Memory Growth Theory,” stating that the density of flash memory would double every 12 months.

Do-Young Kim nirvana1@donga.com