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Samsung is the infrastructure maniac: can Li zaireng lead Samsung to a higher level?

via:博客园     time:2020/10/28 22:01:27     readed:134


Li Jianxi

By Zhang Xiaowang

Source: Alphabet (ID: wujicaijing)

Li Jianxi's death has brought Samsung back to the Chinese public's view, after Samsung's mobile phone's existence in the domestic market has already dropped to the freezing point.

Year 2016

But the mobile phone business has suffered in China

Nowadays, when people use non Samsung mobile phone brands such as iPhone, Huawei and Xiaomi to obtain information and entertainment, they are already consumers of Samsung (Electronics): from chip foundry to memory to display panel, Samsung almost controls the lifeblood of the global mobile phone industry chain, as a supplier, everywhere.

In the display panel field, according to the strategy analytics report, in the first half of the year, Samsung display led the smartphone display panel market with 50% revenue share, and BOE and Tianma microelectronics ranked second and third accounted for only 15% and 8%.


In the global market of NAND flash memory chips for smart phones, Samsung remained the first in both shipment and revenue in the first half of the year, accounting for 43% of the global revenue share, more than double that of its second competitor.

In the field of chip OEM, according to market research firm trendforce, Samsung is expected to occupy 17.4% of the global OEM market in the third quarter of this year, while TSMC still dominates, with a market share of 53.9%.

In the semiconductor market, Samsung's revenue share in the first half of the year was 49%, while that of SK Hynix and micron technologies was 24% and 20%, respectively. Earlier, in 2017, Samsung ended Intel's 25 year dominance and became the world's largest semiconductor company.

With Samsung's influence, can even let some mobile phone enterprises Shunchang reverse death. Xiaomi was in a supply chain crisis after Samsung decided not to supply Amoled screens to Xiaomi in 2015, which delayed Xiaomi's Note 2 release for nearly a year, Xiaomi's annual sales fell 36 percent in 2016.

Samsung's global handset industry chain

Semiconductor business has become Samsung Electronics' largest revenue source. In the second quarter, Samsung's semiconductor business received more than $15 billion in revenue, more than 80 percent of which came from memory chips.

At present, Samsung still maintains a high penetration into the global mobile phone industry, just like hydropower coal, which has become the infrastructure supplier of mobile phone industry. However, Samsung's position is being challenged by domestic panel manufacturers BOE and TSMC. Mobile phone manufacturers are finding alternative solutions in the upstream supply chain.

The burden is on the shoulders of Li Zairong, the successor.


A smart phone contains about 1800 components, including the main chip, screen, camera sensor, memory and flash memory. These key components often account for more than 50% of the cost.

Samsung has long been at the top of the mobile phone industry food chain, due to the market share in these key components.

According to the China Economic Industry Research Institute, the global smartphone panel shipped about 804 million pieces in the first half of 2020, of which Beijing and Oriental shipped about 180 million pieces, ranking first in the industry, followed by Samsung and shipped about 150 million pieces. But on the AMOLED panel shipment, Samsung rides the dust. According to Stone Partners data, Samsung Oled screen shipments reached 61.6 million in the first quarter of this year, with a market share of 90.2.

It is worth noting that Samsung AMOLED screen is now the flagship standard of major mobile phone brands. In the recent iPhone 12 series, except for the 6.1 inch iPhone 12 screen supplied by LG display, the other three products are supplied by Samsung display.

As mentioned above, Samsung accounts for 43% of the global revenue in the NAND flash memory chip market of smart phones, and is the second largest chip foundry outside TSMC.


Moreover, according to techno systems research, a Japanese research firm, Sony accounted for 49.1% of the image sensor market in 2019, and Samsung ranked second with 17.9%.


Samsung has been increasing its capital investment since the 1970s. According to the report of Chinese business strategy, reviewing the development history of Samsung in the semiconductor industry, it has been losing money in investment memory for 13 years and LCD panel for 7 years.

At the expense of heavy money, what we have accumulated is the technical barriers that competitors are hard to catch up with. Once this kind of barrier is formed, it is very difficult to break down.

At present, Samsung is the world's best supplier of AMOLED screens, and also the only three suppliers with high-end process chip OEM capability. The other two are TSMC and Intel. As for the memory market, Samsung has occupied half of the industry for a long time, and its position is hard to shake.

However, in recent two years, due to the impact of trade friction between Japan and South Korea and competition from Chinese manufacturers, Samsung began to significantly slow down.

In the whole year of 2019, the revenue of Samsung Electronics was 230.4 trillion won, about 195.6 billion US dollars, a year-on-year decrease of 5.5%; the net profit was 21.74 trillion won, about 18.5 billion US dollars, a year-on-year decline of 51%.

The semiconductor business, which accounts for nearly 70% of Samsung Electronics's revenue, made an operating profit of 14.02 trillion won in this year, nearly 70% lower than that of won 44.57 trillion in 2018.

In 2017-2018, the semiconductor industry was known as the semiconductor industry, according to city reports

In July 2019, Japan announced that it would strictly review semiconductor materials in order to strengthen export control to South Korea.

This is a big blow to Samsung: from January to May of 2019, 94% of incubation polyimides, 92% of photoresist and 44% of hydrogen fluoride in South Korea came from Japan, and Samsung's most important OLED screen production line also relies heavily on equipment provided by Japanese suppliers.

On the other hand, Chinese panel companies such as BOE, csot and Tianma are also challenging Samsung.

In 2019, the profit of Samsung's display panel business dropped by 39.69% year-on-year. In this regard, Samsung explained that: first, the price of LCD panel fell more than expected due to factors such as the expansion of Chinese competitors' capacity; second, the demand for flexible OLED display screen used for high-end smart phones dropped sharply, and the slowdown in demand for smart phone market was also one of the main reasons affecting its panel business.


What is Samsung's core competitiveness?

By the time Samsung launched 64 KB DRAM in 1984, the price of memory chips had plummeted from $4 to 30 cents. At that time, Samsung's production cost was $1.3 per piece, which became a losing business. Then, Sony, Toshiba and other Japanese companies repeatedly cut production, Intel in the United States after six consecutive quarters of losses, forced out of memory chips.

Lee was unmoved, and even though Samsung had lost more than $300 million by the end of 1986, he was investing in the bottomless hole. At the time, a Samsung executive persuaded Li Bingzhe:

In 1987, Samsung turned the corne

In 1992, Samsung took the lead in launching the world's first 64M DRAM and surpassed NEC in Japan to become the world's largest DRAM manufacturer. Two years later, Samsung launched another 256M DRAM.

In the downward cycle of the industry, in the face of continuous huge losses, it is no different from a gamble for Samsung. Fortunately, after the dark time, Li Jianxi led Samsung Electronics out of a smooth road.


But Li Jianxi is not satisfied, won the memory chip battle soon, he with the same courage, engaged in the LCD panel this new war. This is

In 1991, Samsung set up a panel division and built the first trial production line. But this year, the industry experienced its first recession, and for the next seven years, Samsung lost $100 million a year from 1991 to 1994.

By 1995 and 1996, the LCD industry was once again in recession. However, Samsung bucked the trend and was willing to endure huge losses for many years. By 1998, Samsung completed its 3.5-generation line, which was already ahead of Japanese enterprises. In the same year, Samsung surpassed sharp to become the world's largest panel enterprise.

It is worth noting that Samsung's success can not be separated from the support of the Korean government. In fact, from that time on, the relationship between Samsung and complicated relationship between Samsung and Qingwatai forces.

Korea ,1983-1987

The economist has also revealed the secret of Samsung's success: its huge resources are concentrated in a small number of consortia. They can quickly enter the capital intensive semiconductor industry, overcome the huge financial losses in the initial stage of production and finally make profits.

However, looking back on Samsung's growth in the semiconductor industry, the support of the South Korean government is of course very important. However, the core of Samsung's success lies in Li Jianxi's determination and determination in the face of the downward cycle of the industry, the unremitting pursuit of core technologies, and the almost cost free innovation investment.

This point, from Li Jianxi's desire for talent can be seen. In 2002, Li Jianxi said in front of many presidents:


Zhang Zhongmou

He even had the idea of TSMC founder Zhang Zhongmou, who revealed that Li Jianxi had offered him olive branches when he visited Taiwan in 1989 for business inspection, which he declined. What Li didn't know at that time was that Zhang Zhongmou founded TSMC in 1987. Now in the field of chip OEM, TSMC has become Samsung's biggest competitor.


After Lee's death, the Associated Press said:

In the minds of most ordinary readers, until Li Jianxi's death, the name of the founder of SamSung group was far less than that of jobs. What's more, people only know Samsung, but they don't hear about Li Jianxi.

In terms of influence, jobs almost led the entire smartphone market revolution by himself. However, when we focus on the enterprise itself, Li Jianxi's influence on Samsung Group is no less than that of jobs on apple.

In 1987, when Li took over his father Li Bingxi, Samsung's debt ratio had reached 300% due to excessive expansion. What's more, in the situation of the gathering of family entrepreneurs, Samsung seems to have lost their morale and fell into complacency and old-fashioned mood.

In the spring of 1988, Lee told Samsung's 50th Anniversary Conference

Since the beginning of 1993, Li Jianxi frequently inspected the markets of the United States, Japan and Germany. During the inspection, Li Jianxi witnessed Samsung's products abandoned in the remote corner of the shopping mall, learned about the disadvantages of Samsung's shoddy production and realized the gap between Samsung's products and Sony and other popular products in the market at that time.

The situation that Li Jianxi faced at that time is reminiscent of Haier and Zhang Ruimin in 1985.


Zhang Ruimin

There are 76 defective units in 400 refrigerators, so high

According to Tencent technology, less than two months after returning from Frankfurt, Li Jianxi made 48 speeches to various departments of Samsung, totaling more than 350 hours, and compiled a book for distribution, thus spreading the atmosphere of reform to the whole Samsung.

It was at that time that Lee called out that

Li Jianxi, who is far away on the other side of the ocean, may have heard the news that Zhang Ruimin smashed the refrigerator. He also showed his determination: there was a quality problem in the phone, so he ordered the bulldozer to crush 15000 poor quality wireless phones into pieces, and ordered the person in charge to be present to watch; three star mobile phone was complained by customers, and he ordered the destruction of $50 million worth of mobile phones in stock.

Looking back, Li Jianxi set off this scene

As a result, Samsung began to move from a local Korean company to a global market. There is no doubt that Lee is Samsung


Li zaireng

Looking back on today's Samsung, whether this giant ship can continue to sail normally under the rule of Li Zai Rong is a matter of great concern to the outside world.

What Li Jianxi left behind for Li Zairong is an empire of mobile phone industry, but this empire is not stable now. Surrounded by powerful enemies, complicated geopolitical situation, and intensified contradictions between chaebol forces and qingwatai, etc., are the biggest stumbling blocks for Samsung.

Can Li zaireng lead Samsung to a higher level with the courage of reform, just like his father did in those days?

reference material:

1. "Shadow of Samsung empire under the epidemic situation: the biggest consortium in South Korea is in a profit crisis", market sector;

2. One article to understand Li Jianxi's life: a key figure in bringing Samsung from the second class factory to the Empire, Tencent technology;

3. The death of Samsung Godfather Li Jianxi: compared with jobs, it was also controversial;

4. Semiconductor Past: China, Japan and Korea

5. Terrible Samsung Semiconductor, semiconductor industry observation;

6. The legend of Li Jianxi, the strategy of Chinese businessmen;

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