Samsung's latest technological achievement is expected to widen its gap with global competitors, now six months or so, to at least one year. It is also significant that the technology can provide new growth momentum for mobile telecommunications, computers, cellular phones and digital music players. The Korean company now aims at, quite rightly, emerging as a comprehensive semiconductor maker by focusing on mobile and digital consumer applications.
"Our goal is to beat Intel to become the world's No. 1 player," says CEO Hwang Chang-gyu.
For those who know Samsung and Hwang, it may not appear to be just a pipe dream. Samsung, who jumped into the business 20 years later than foreign rivals, has risen to the status of world's largest memory chipmaker and the second largest overall. Samsung under Hwang has redoubled chip capacity every year since 1999, creating an industrial pattern named "Hwang's law," overturning the previous "Moore's law" that had correctly observed the number of transistors per integrated circuit would double every couple of years. Behind Samsung's success is keen insight into the industry's future direction and bold investment in manpower and technology, which should serve as a role model for other Korean businesses.
Still this is far from saying Samsung, or the nation's semiconductor industry for that matter, is free from problems. Samsung's global market share is still half Intel's and the Korean company relies on the memory sector for 80 percent of total sales, which account for only 15 percent of the world semiconductor market. This is particularly dangerous as the prices of memory chips could tumble to one tenth anytime. Samsung may also have to prepare for concerted challenges from foreign rivals through tie-ups and M&As.
Most importantly, Korea's semiconductor industry should get out of its heavy reliance on Japanese manufacturing facilities. Only when the nation stands on its own in equipment and materials, too, can it boast the status of global leader.