Hwang Chang Kyu President of Samsung Electronics' Semiconductor Operation

Samsung Electronics has grown into a semiconductor producer of the first rank since entering the semicon business by acquiring Korea Semiconductor in 1974.

The company occupied the no. 2 slot in the world semiconductor market last year claiming 5.9% of the entire global market with a turnover of $10.5 billion.

According to Dataquest, Samsung Electronics ranks behind Intel with a $27.1- billion turnover and a 15.3% market share. The company is narrowing the gap with Intel and widening a gap with the no. 3 company.

In memory semiconductor components, the company's DRAM, flash memory, SRAM products ranked No. 1 last year. In 2003, Samsung Electronics consolidated its No. 1 position in the memory semiconductor field, accounting for 24.9% of the world market with an $8.4-billion turnover.

The company has been No. 1 in the DRAM field for 12 consecutive years. In 2003, Samsung Electronics widened the gap with the No. 2 in the memory semicon field, Micron. According to Dataquest, Micron had an 18.9% market share based on a $3.3-billion turnover. As of the second quarter of this year, Samsung Electronics' market grip is becoming firmer with a market share of 29.7%.

In the field of Flash memory, Samsung Electronics is in a firm No. 1 position with a market share over 60%. The company rose to the first rank in the entire Flash market in 2003. In the case of SRAM, Samsung Electronics has held the No. 1 spot from 1995 up to, and including, last year. According to Dataquest, Samsung Electronics had a SRAM market share of 26.9% in 2003.

In LCD drive ICs, the company was No. 1 last year, a position it has held since 2002; this year its market share is expected to exceed 25%. Meanwhile the company is forecasted this year to rise to the No. 2 slot in CMOS image censors, an item used in camera phones.

Unrivaled leadership in NAND Flash market

Concerning the prospects for the fourth quarter of the year, a spokesperson of Samsung Electronics' semiconductor division noted, "The demand for PCs is forecast to peak during the fourth quarter of the year, and grow over the next five years by 16% annually."

With regard to the outlook for next year, the spokesperson said that the DRAM market in the first half of next year will recover somewhat although it will likely turn downward in the latter half of 2005. Since memory demand is projected to grow by 27% on average from 2003 through 2007, if 3G is adopted in such products as cellular phones, DRAM is likely to grow by 109% and NAND and NOR look to grow by 89% and 5%, respectively. DRAM's MBPS (Mega Byte Per System) is forecast to grow by 27% this year, and by 32% next year.

In the case of NAND Flash, the proportion of 3G cellular phones using built-in NAND memory is forecast to grow by 8% in 2004, by 14% in 2005, by 20% in 2006, and by 30% in 2007. Samsung Electronics expects to produce a turnover of $2 billion in One NAND in 2006.

Hwang Chang Kyu (right) shows an eight giga NAND Flash memory product.

Samsung Electronics' semiconductor division breaks down into two parts: its memory business part that produces and sells DRAM, flash memory, and SRAM; and the system LSI component that produces display drive ICs (DDIs), SoC (System-on-Chip), and mobile CPUs.

The company is firmly consolidating its position as the world's No. 2, widening a gap with the third ranking firm more which has a market share of only 5.9% based on a turnover last year of $10.5 billion.

As of the end of 2003, Samsung Electronics has occupied the No. 1 spot in the memory business for 11 consecutive years, in DRAM for 12 consecutive years, and in SRAM for 9 consecutive years. In flash memory also, the company has risen to the foremost rank in the world, occupying a market share of 19.4% with a $2.255-billion turnover last year.

Among the major product groups, Samsung Electronics maintains an unrivaled superiority in DRAM, operating in the black through offering solely high value-added product over the past 1 to 2 years when competing companies showed a loss. The company has also expanded its share of the SRAM market.

Enhancing technological leadership & cost competitiveness

The flash memory has recently undergone explosive growth; NAND flash, that represents a revolution in the storage market, is at the center of this expansion. Samsung Electronics is maintaining unrivaled leadership in this field with a market share of 60%.

In terms of technological edge, Samsung Electronics marked a world first by introducing its 70-nano process 4Giga NAND Flash last year.

In addition, Samsung Electronics plans to concentrate on developing its mobile CPU business based on its System-on-Chip technology that produces CPU speeds of 533Mhz, the highest in the world. Another priority is display drive ICs, in which the company ranks first in the world with a market share of 25%, and smart card chips, in which it is No. 2 in the world.

Accordingly, the goal of Samsung Electronics is to become a superlative semiconductor producer by joining its capability in the memory and non-memory sectors.

Regarding the company's semiconductor business strategy, Samsung Electronics plans to strengthen core competitive elements such as flexibility, responsiveness and speed.

To cope with rapidly changing semiconductor market in an aggressive manner, Samsung Electronics has decided primarily to reinforce its top-ranking capability by concentrating on nano-notch technology development, a next-generation semiconductor technology, on which it will develop future-oriented products such as MCP, SiP, SOC, and New Memory.

Second, the company will strengthen its business structure, placing emphasis on high-profit lines such as DDR2 DRAM as well as 1G/2G flash memory, and promote world-class products such as SOC, CIS, and LDI in the system LSI field, too.

Third, Samsung Electronics plans to enhance its technological leadership as well as its cost competitiveness.