"Samsung Electronics Signals No Memory Production Cut... Must Embrace Lee Byung-chul's Spirit"

The Economist Points Out
"May Have No Desire to Take Competitors' Market Share"
"Should Take Intel as a Cautionary Example"

The British weekly magazine The Economist interpreted Samsung Electronics' memory production cut as a 'sign of complacency' and pointed out that the spirit of the late chairman Lee Byung-chul should be revived.

[Image source=Yonhap News]

On the 13th (local time), The Economist published an article titled "Samsung should beware of complacency like Intel," noting that it was interesting that the stock prices of competitors SK Hynix and US-based Micron also rose following Samsung Electronics' decision to cut memory production. This can be interpreted as Samsung being too comfortable at the top position in the memory triopoly, showing no desire to take more market share from competitors, which could be seen as an expectation that the market will stabilize in the future.

The Economist said that a complacent atmosphere was also evident at last November's investor briefing. At that time, Samsung Electronics seemed satisfied with the forecast that the overall DRAM market would triple rather than focusing on capturing competitors' market share. The Economist also noted signs of complacency in other areas, citing Pierre Ferragu of advisory firm New Street Research, who pointed out that Samsung Electronics has lost some innovation leadership in DRAM and NAND technologies to SK Hynix and Micron.

The Economist pointed out that a similar sentiment led to Intel's decline in the late 2010s when it began to fall behind Taiwan's TSMC and Samsung Electronics in the advanced system semiconductor sector. It also diagnosed that Samsung Electronics' goal of becoming the world's number one foundry (semiconductor contract manufacturing) by 2030 has not gained traction for similar reasons.

According to The Economist, Samsung Electronics has the same production capacity as TSMC and may even be ahead in semiconductor design, yet its market share has stagnated. The Economist said, "Samsung Electronics must compete with TSMC by radically changing its semiconductor production model." Developing system semiconductors directly while also doing contract manufacturing could intimidate customers who are also competitors, such as Apple, the analysis said.

Ferragu said that unlike Intel in system semiconductors, Samsung Electronics is unlikely to give up its leading position in memory. Nevertheless, The Economist suggested that Samsung Electronics would benefit from regaining the original spirit of the late chairman Lee Byung-chul. When Lee announced Samsung's entry into the semiconductor business with the "Tokyo Declaration" in 1983, he emphasized that although Korea lacked raw materials, it had educated and diligent personnel. The Economist added that based on this, Samsung Electronics was always the last survivor during economic downturns and dominated market share when others struggled.

This content was produced with the assistance of AI translation services.