The Economist, a British weekly magazine, warned to revive the spirit of former chairman Lee Byung-cheol, saying that Samsung Electronics’ memory production cuts were a sign of complacency.
The Economist said on the 13th (local time) in an article titled, “Samsung should be wary of complacency like Intel,” that it is interesting that Samsung Electronics has decided to cut memory production, and the stock prices of its rivals SK Hynix and US Micron also jumped in together. A simple interpretation of this is that the capitulation of leading companies is seen as a sign that the bottom is near.
However, The Economist pointed out that there is a more sophisticated explanation, that the place of the memory triumvirate at the top could be so comfortable that there is no desire to capture more share from competitors. This is because the market is stable. Also, this is a sign that Samsung Electronics is complacent.
The Economist said that the atmosphere of complacency could be seen in the briefing session for investors held in November last year. At the time, Samsung Electronics seemed content with the prospect of the overall DRAM market growing threefold rather than trying to take market share from its competitors.
The Economist also appears to be complacent in other areas, notes Pierre Ferragu of New Street Research, an advisory firm, noting that Samsung Electronics has lost some of its innovation leadership to SK Hynix and Micron in DRAM and NAND technology. “When you’re no longer fighting for survival, you settle down,” he said.
The Economist said similar sentiments drove Intel down in the late 2010s when US semiconductor champion Intel began falling behind Taiwan’s TSMC and Samsung Electronics in advanced system semiconductors. The Economist found that Samsung Electronics’ goal of becoming the world’s No. 1 foundry by 2030 is also not on track for reasons familiar to Intel.
Last month, the South Korean government announced plans to build the world’s largest semiconductor cluster in Yongin, which will not be enough to raise Samsung Electronics’ share of the foundry to more than 16 percent, the media predicted. According to The Economist, Samsung Electronics has the same production capacity as TSMC and is probably more advanced in semiconductor design, but its market share is stagnant.
The Economist said Samsung Electronics may have to change its semiconductor production model more radically as it competes with TSMC. It is said that the structure of direct system semiconductor development and delivery of production may scare customers who are also competitors such as Apple due to the possibility of conflict of interest.
Ferragu said he doesn’t see Samsung relinquishing its memory lead, as Intel did in system semiconductors. The Economist said, “Still, it would be good for Samsung Electronics to regain its original intentions when it was chairman Lee Byung-cheol.” In 1983, when former Chairman Lee announced his entry into the semiconductor business through the ‘Tokyo Declaration’, he presented that Korea lacked raw materials but had educated and hardworking human resources.
At the same time, Samsung Electronics marched through the competition with a fighting spirit or “martial arts style” work ethic to occupy an unrivaled position in the global memory market.
Reporter Seo Jae-chang of Helloty |
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