… innovations in the broadest sense of the world: technology, hardware and software engineering and design, marketing in general and branding in particular etc.

Updates: Q2 record-high operating profit + smartphone worries deepen + overall business situation + nonproportionally high capex of the semiconductor business +  the #2 capex beneficiary, the Display Panel Segment

Samsung Electronics posts record-high operating profit in Q2 [arirangnews YouTube channel, July 5, 2013]

Samsung Electronics’ Pre-Earnings Guidance [Samsung public disclosure, July 5, 2013]

On July 5, 2013, Samsung Electronics disclosed its ’13. 2Q consolidated earnings estimate as follows.

– Sales: Approximately 57 trillion Won [$49.86B]
– Operating Profit: Approximately 9.5 trillion Won [$8.31B]

The above figures are consolidated earnings estimates based on K-IFRS. Korean disclosure regulations do not allow earnings estimates to be given in a range. Therefore, the above figures are the median of the earnings estimate range given below.

– Sales: 56 ~ 58 trillion Won
– Operating Profit: 9.3 ~ 9.7 trillion Won

* The above information is provided for the convenience of our investors, before the external audit on the financial results of our headquarters, subsidiaries and affiliates is completed.

Samsung Electronics’ second quarter misses forecast as smartphone worries deepen [Reuters, July 5, 2013]

… Now investors fear Samsung may also follow in the footsteps of Apple and other once-mighty players that are struggling with shrinking margins, in an industry where companies live and die by their ability to stay ahead of the innovation curve. … “One of the biggest risks for Samsung Electronics going forward is that 70 percent of total operating profit comes from mobile business. Diversification is key. Samsung needs to engage in active business transition until end-2014,” said Jeff Kim, an analyst at Hyundai Securities. … Samsung spent more on marketing than R&D in 2012 for the first time in at least three years, and the S4 was launched in March with a Broadway-style show in New York. The company also invested heavily in distribution channels including opening brand shops in 1,400 Best Buy stores in the United States. But the glitz and glamour has failed to arrest a slide in handset sales growth, and shipments are seen rising only 4 percent to 8 percent in the second quarter from the previous quarter. …

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The overall business situation of Samsung Electronics as of the end of Q2 2013

Samsung Electronics Announces Earnings for Q2 in 2013 [press release, July 26, 2013]

Samsung Electronics Co., Ltd. today announced revenues of 57.46 trillion won [$51.6B] on a consolidated basis for the second quarter ended June 30, 2013, a 9-percent increase from the previous quarter. Consolidated operating profit for the quarter reached 9.53 trillion won [$8.56B], representing a 9-percent increase on quarter, while consolidated net profit for the same quarter was 7.77 trillion won [$6.98B].

In its earnings guidance disclosed on July 5, Samsung estimated second quarter consolidated revenues would reach approximately 57 trillion won [$51.2B] with consolidated operating profit of approximately 9.5 trillion won [$8.53B].

…

Samsung announces second quarter profits 삼성전자, 2013년 2분기 실적 발표 [arirangnews YouTube channel, July 25, 2013]

Segmentwise and from outlook point of view, from: Earnings Release Q2 2013, Samsung Electronics, July 2013 presentation [July 26, 2013]

But: while handset revenue was up by 9% the operating profit for handsets and network products together were down by 3%. Considering that 97.3% of the IM (IT & Mobile Communications) revenue is for handsets that essentially means a similar operating profit drop of ~3% for handsets alone. Note that while the margin was 17.7% a year ago (in 2Q ’12) now (in 2Q ‘13) it was the same 17.7%, so with that 3% drop there was no fundamental problem (yet). Note as well that 66% of the operating profit was from IM, i.e. around 66% from handsets which constitute 97.3% of the total IM revenue.

Samsung explains the 3% IM operating profit drop by “marginal profit decline due to increased costs of new product launches, R&D and retail channels investments, etc.” as you could see below:

Fundamental problem could well be with the handset (IM) market share outlook, as neither for 2Q ‘13, nor for the outlook market share was talked about at all.

In the continuation of Samsung Electronics Announces Earnings for Q2 in 2013 [press release, July 26, 2013] there are certain remarks regarding all that:

…

Highlighting the quarterly performance, growth remained steady in high-end smartphone and premium television businesses. Most noticeably, a growth spurt in shipments for OLED panels for smartphones and high consumer demand for air conditioners spurred growth.

Led by the much-awaited launch of GALAXY S4, smartphone shipments and revenue increased from the March quarter. The strong growth streak for the smartphone market is expected to continue in the third quarter albeit at a slower pace.

The components business [Semiconductor] improved both in terms of revenue and operating profits from a quarter earlier due to a higher demand for mobile device-related parts. However, overall sales of logic chips declined due to lower mobile application processor shipments.

Escalated investments in R&D and in distribution channels, as well as expenses on new product launches have dampened wider gains for IT & Mobile Communications (IM) Division, which encompasses the Mobile Communications, Networks, and Digital Imaging businesses.

…

The Display Panel [DP] segment’s operating profit jumped 46 percent on quarter to 1.12 trillion won thanks to strong demand for high value-added panels for IT and TV panels sized 60-inch and over. A mid- to low-end TV lineup targeting emerging markets and a range of premium TV offerings were credited for the Visual Display business’ earnings. As for the next quarter, uncertainties over Europe’s economy and Chinese subsidies for electronics goods could possibly hinder growth.

then in terms of business outlook: 

[for IM] Looking ahead, Samsung smartphone sales are expected to pick up in the third quarter and outperform global market forecasts. Smartphones will grow to account for over 70 percent of the company’s mobile phone shipments in the third quarter due to the strengthening mid- to low-end mobile market. Growth momentum in the July-September quarter will remain on course, although at a slightly reduced pace.

In the case of tablet PCs, Samsung will post growth in the mid-10 percent range with the introduction of new tablets. Shipments of tablets will jump to a little over 30 percent on-quarter, outpacing the market.

Average Selling Price (ASP) of smartphones will likely be impacted due to a wider range of low- to mid-priced smartphones hitting the market. Sales of tablet PCs are expected to remain solid and Samsung is looking to expand global sales with a broad portfolio of models including GALAXY Tab 3.

Samsung is also looking to improve profitability in IM through its lineup of mid- to high-end hybrid tablet-laptop devices such as ATIV Q and wider adoption of LTE mobile telecommunication technology.

…

[for Semiconductor] In the July-September quarter, demand for DRAM used in data centers is expected to remain high. Orders from the electronic gaming industry will add to profit margins as video gamers seek more powerful graphics DRAMs. Peak seasonality will help PC sales by a slight margin.

Samsung will try to ramp up sales of application processors (AP) with 28-nanometer process technology and high-resolution image sensors. Demand for the components is expected to grow as mobile devices needing more processing power roll out into market in the remaining quarters.

By diversifying its product portfolio and consumer base, and by gearing up development of 20 nm-class and 14 nm-class process technology, Samsung aims to achieve a stable level of growth.

[for DP]

Looking ahead to the third quarter, Samsung anticipates market growth as higher seasonal demand for panels takes effect. For TV panels, demand is expected to be dampened by economic uncertainties although the large-size premium panel market is expected to sustain growth. Samsung aims to strengthen its leadership in the high-end TV panel segment with expanded sales in UHD panels and in the 40- to 50-inch class.

Concerning the market outlook for IT panels, although uncertainty remains in the PC and monitor sector, robust demand for tablet displays is expected to continue as new products are launched by manufacturers in the latter half of 2013. Samsung plans to reinforce its market leadership in tablet panels by expanding its lineup of high-resolution and mass market displays.

For OLED panels, positive growth for high-end smartphone displays is expected to be maintained in the second half. To ensure continued momentum, Samsung will concentrate on offering differentiated smartphone displays through technological competitiveness, including flexible display technology, and focus on enhancing cost competitiveness.

A business situation (described both in the Q2 results and in the outlook) required a significant change in the investment strategy which described in the Samsung Electronics Announces Earnings for Q2 in 2013 [press release, July 26, 2013] as:

As for this year’s capital expenditure, Samsung Electronics plans to spend a record total of 24 trillion won [$21.5B], an increase of over 1 trillion won [$0.9B] from the previous year. This amount may increase depending on market conditions in the second half and the outlook for next year.

The Semiconductor business will invest 13 trillion won [$11.7B], while the Display Panel segment will inject 6.5 trillion [$5.8B] in capex. The increase in spending is aimed at enhancing Samsung’s competitive edge in growth-generating, high value-added DRAM, NAND and System LSI products.

In the second quarter, capex amounted to 5.2 trillion won [$4.7B], in which the Semiconductor business was responsible for 2.2 trillion [$1.97B] and 1.3 trillion won [$1.17B] in spending was accredited to the Display Panel segment. All told, a total of 9 trillion [$8.1B] won or 38 percent of the planned capex investment was made in the first half of the year.

which led to the 3d party headline Samsung to spend KRW19.5 trillion [$17.5B] on component business in 2013 [DIGITIMES, July 30, 2013] including the following explanations:

Samsung Electronics expects to spend a total of KRW19.5 trillion (US$17.5 billion), equivalent to 81.25% of its total capex, on the company’s component business in 2013. Of the planned capex, KRW13 trillion [$11.7B] will be invested in its semiconductor business while KRW6.5 trillion [$5.8B] will be spent on its display panel business.

Samsung will allocate KRW24 trillion [$21.5B] for its 2013 capex, up from the record KRW22.8 trillion [$20.5B] reported for 2012.

The capex plan was disclosed when Samsung announced record operating profits for the second quarter of 2013. Despite the record earnings, its mobile division that accounts for the majority of company revenues and profits posted disappointing results in the quarter. In contrast, sales and profits at its component division performed relatively brisk.

Considering Samsung’s Q1 earnings release data: [$1.35B]

As for this year’s capital expenditure, Samsung Electronics executed a combined total of 3.9 trillion won [$3.5B] for the quarter. The Semiconductor and Display Panel segments were each accountable for 1.5 trillion won [$1.35B] in capex spending. Samsung is poised to increase investment beginning from the second half of the fiscal year to preempt rising demand for differentiated products and to harness its competitiveness in the high-tech industry.

I came to the following overall capex situation:

Note that this is in sharp contrast to Intel capex changes as per UPDATE 3-Intel cuts 2013 revenue forecast, capex as PC industry sags [Reuters, July 17, 2013]

Intel Corp cut its full-year revenue forecast and said it is scaling back capital spending as it adjusts to a painful contraction of personal computer sales and economic weakness in China, one of its biggest markets.

The forecast and cut in capital spending were announced on Wednesday in the company’s quarterly earnings report, the first under new Chief Executive Brian Krzanich. … “Intel was slow to respond to the ultra-mobile PC trends,” Krzanich said. “We will move Atom even faster to our leading-edge silicon technology.”

…

Faced with slow demand, Intel said it was cutting 2013 capital spending to $11 billion, plus or minus $500 million. The cut follows a similar reduction from $13 billion to $12 billion in April. Intel said it expects 2013 revenue to be flat from the year before. Last quarter Intel forecast a low single digit percentage increase in 2013.

… Global shipments of personal computers dropped 11 percent in the second quarter, the fifth straight quarterly decline in a market that has been devastated by the popularity of tablets.

… Intel posted second-quarter revenue of $12.8 billion and said revenue in the current quarter would be $13.5 billion, plus or minus $500 million.

Analysts expected $12.896 billion in revenue for the second quarter and $13.732 billion for the current quarter, according to Thomson Reuters I/B/E/S.

For the second quarter, Intel reported net earnings of $2.0 billion, or 39 cents a share, in line with expectations. That compared with $2.827 billion, or 54 cents, in the same quarter last year.

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The non-proportionally high capex of the semiconductor business deserves attention. From latest press releases of that segment we know the following:

From: Samsung Foundry 14nm FinFET [brochure, March 7, 2013]

Strong 14nm FinFET Logic Process and Design Infrastructure for Advanced Mobile SOC Applications

Samsung Foundry’s advanced 14-nanometer (nm) FinFET process technology offers a robust design infrastructure to drive future mobile application markets. As mobile applications continue to demand a more PC-like user experience, Samsung’s FinFET process technology enables system-on-chip (SOC) designers to reap all of the advantages for the latest energy-efficient processors: die-size reductions, faster frequencies, and lower power consumption.

Estimated groundbreaking and completion dates Characteristics of FinFET transistor performance are closely correlated to the high aspect ratio (AR) of fin height/fin width. The challenges of the FinFET structure include: control of the fin width and height dimensions, the ability to scale the fin width down to sub-20nm nodes and gate length dimension control over a high AR while precisely controlling all of these parameters during manufacturing.

Advantages of 3 dimensional design Samsung’s FinFET technology, unlike planar transistors with flat, multi-layer designs, uses a tall wall-like gate, 3D-structured design to minimize leakage, and in turn, increase a chip’s reliability and power at a small node process. Additionally, as less heat is generated and the power supply lasts longer, clock frequencies can be tuned for system critical components without overstepping system power requirements.

Solid design ecosystem Samsung’s 14nm FinFET process node is supported by an ecosystem of partners including ARM®, Cadence® Design Systems, Mentor graphics® and Synopsys®. With their collaboration, Samsung’s 14nm FinFET technology process taped out multiple test chips ranging from a full ARM Cortex™-A7 processor implementation to a SRAM-based chip capable of operating near threshold voltage levels, as well as an array of analog IP.

Silicon-based Process Development Kits Samsung Foundry’s 14nm FinFET process design kits (PDKs) provide customers with models, design rule manuals and technology files that have been developed based on silicon results from previous 14nm FinFET test chips run. Samsung’s 14nm FinFET PDK includes: design flows, routers and other design enablement features to support new device structures, local interconnects, and advanced routing rules. Samsung Foundry continues to lead the industry in providing its customers with early access to all elements of the design infrastructure to enable accelerated chip development.

Samsung talks about their 14nm FinFET process [SemiAccurate, May 28, 2013]

…

Ana Hunter of Samsung cleared up a lot of the issues that were floating around the Samsung version of the process. Please bear in mind that although the bulk of the technology is the same between the three partners, all can and likely will deliver different flavors of 14nm to their customers. What Samsung is doing may or may not be mirrored by IBM and Global Foundries, and vice versa.

The first thing is that Samsung is on track to deliver the process on the promised schedule, that would be 14nm customer tapeouts in Q1/2014. This is a pretty good validation that the time to market advantages of changing the transistors and not the interconnects is happening as promised. At the moment Samsung just completed the third rev of their Process Design Kit (PDK) and are using them internally for logic development. Customers have 14nm test wafers running through the fabs right now too, the main goal is to run test chips to see what types of structures will best suit their planned chips and how aggressively they will implement some of the offered technologies. Samsung described the yields on current test chips as good and logic libraries are well in to development now.

For the 14nm process the Front End of Line (FEOL) is completely new, the Back End of Line (BEOL) is mostly carried over from 20nm. Metal 1 and higher are the same as the older 20nm process so any characteristics determined by that technology will be constant for all three partners. Samsung is modifying the playbook from there a bit by focusing on tighter poly and contact pitches. There are no new design rules but Samsung is being fairly aggressive in pushing these two areas and likely a few more not discussed too.

The refrain in January was that 14nm would bring no die shrinks, but that isn’t quite the case at Samsung. While it is true that the 50% shrinks of processes past are not going to happen this time, there will be between a 7% and 15% shrink thanks to the poly and contact pitch work. This has been validated by SRAM test parts, they are showing those gains and they are fairly representative of what you can get out of a device.

Much of what the customers are doing with the test chips being run at the moment centers around how aggressively they want to push these boundaries for their devices. If they want to take full advantage of what Samsung is doing the maximum 15% should be achievable but works is still ongoing. How much each partner chooses to push shrinks will likely be the main differentiator between Samsung, IBM, and Global Foundries.

In the end you will get a chip that looks like it was built on a 20nm process, is sized like it was built on a 20nm process, but has the dynamic range and power consumption of a 14nm chip. You can also order wafers built on the process much sooner than you could a full 14nm process, and reuse much of what you did to build the 20nm variants of your chips. Cost will obviously go up, it always does, but to what degree is still an open question, one unlikely to be publicly answered by any of the players in the near future.

The one question that remains open is what to call this process. All of those offering it stick to the 14nm script but their competition insists that it is 20nm, the rest is spin. SemiAccurate sees both of their points and both are quite valid. The performance is 14nm, the size is 20nm, and there is nothing like it in the past to compare to. So what do you call it? Because there won’t be a full 14nm FEOL + 14nm BEOL process coming from any of the three partners. We will call it 14nm to avoid confusion but won’t argue that it could also correctly be called an enhanced 20nm process.

14nm FinFET implementation of ARM Cortex A-7 [SamsungUSATech YouTube channel, Feb 5, 2013]

Implementing ARM Cortex-A7 in a 14nm Samsung FinFET Process [SoC Design blog of ARM, Feb 5, 2013]

Recently, ARM, Samsung and Cadence announced a joint tapeout of an ARM Cortex^TM-A7 based test chip on Samsung’s 14nm FinFET process.

This collaboration is significant due to a couple of reasons as detailed in this blog and video below:

14nm/FinFET technology

The importance of FinFETs as the next evolution in process technology was resoundingly validated at ARM TechCon last year, where many of the papers touted improvements in the power/performance curve with the usage of FinFETs. Essentially, designers can get better performance with the same power profile, or lower power with the same performance. A 14nm FinFET process can potentially offer a 40-50% performance increase or a 50% power reduction compared to a 28nm process. With power density threatening to become a roadblock to future system on chip (SoC) innovation, FinFET technology is very welcome news indeed.

However, applying a new process technology such as 14nm/FinFETs still requires much effort. The process technology has to mature, EDA methodologies have to be established, and libraries and IP have to be developed. The test chip tapeout referred to above includes a 14nm/FinFET Cortex-A7 along with ARM 14nm/FinFET libraries and a Samsung 14nm SRAM. It was implemented with Cadence’s 14nm methodology during an 8-week period. The tapeout is an important milestone that shows progress in the industry’s move towards being able to mass produce 14nm/FinFET SoCs.

The ARM Cortex-A7

The ARM Cortex-A7 processor is starting to go mainstream in new high-end smartphone applications. Today, the ARM Cortex-A7 is used as the “LITTLE” part in ARM’s big.LITTLE configuration along with the ARM Cortex-A15, offloading computing tasks and improving energy efficiency and battery life.

In addition, it’s also being targeted as the main processor core in new entry level and mid-range smartphones, significantly improving power, performance and area of those devices that used a previous generation core. For applications that don’t need the peak computing power of a Cortex-A15 or Cortex-A9 processor, the Cortex-A7 alternative offers reasonably good performance at significantly lower power and area.

14nm/FinFET technology can potentially amplify the advantage of ARM Cortex-A7 processors by further improving the Cortex-A7’s power/performance benefits.

The entire tapeout project was completed within a tightly-packed schedule of 8 weeks. During that time, engineers from Samsung, ARM and Cadence located in multiple locations around the globe (Korea, Taiwan, U.K., Germany and the U.S.) worked together diligently to make this tapeout successful. As a side note, the tapeout also demonstrates the realities of today’s large design teams, where designers must interact with others in different locations and time zones.

The Methodology Used

As mentioned earlier, the Cadence 14nm methodology was used for this tapeout. This included the following:

• Virtuoso 6.1.5 and Advanced Node environment were used for the standard cell design

• RTL Compiler, Encounter Digital Implementation System (EDI System) and NanoRoutewere used for synthesis and place-and-route respectively

• QRC, Encounter Timing System (ETS), and Encounter Power System (EPS) were used for extraction, as well as timing and power signoff.

From a user perspective, a 14nm/FinFET design methodology is similar to 20nm. Double-patterning is required at 14nm, just like 20nm. Under the hood, EDI System and NanoRoute handle 14nm/FinFET design rules automatically, including same-mask metal rules to prevent double patterning conflicts. The use models for QRC, ETS and EPS signoff at 14nm are also similar to that of 20nm. However, to ensure correct handling of the 14nm/FinFET design rules, as well as making sure the new libraries could be used efficiently, R&D teams from all three companies had to work closely together.

In short, the tapeout of ARM’s Cortex-A7 on Samsung’s 14nm/FinFET process is a significant milestone towards 14nm readiness. We’re all expecting to see more partnership work to come to fruition too, bridging the gap between early testing and production. For more information, see the feature story at Cadence.com. In addition, visit the ARM, Cadence and Samsung booths at the Common Platform Forumin Santa Clara, CA. Dispesh Patel, EVP and General Manager – PIPD, PIEX, ARM also will discuss this collaboration further in his keynote.

Samsung Library and IP Offerings, DAC 2013 IP Talks! – James Bong, Samsung [chipestimate YouTube channel, July 19, 2013]

From: Mentor, Freescale, Samsung DAC talks: EDA, IoT & Mobile growth & challenges [SoC Design blog of ARM, June 7, 2013]

…
Stephen Woo, Samsung Electronics: mobile growth, problems with solutions, and challenges [watch the video record of the KEYNOTE New Challenges for Smarter Mobile Devices]

Tuesday morning’s main keynote was presented by Dr. Stephen Woo of Samsung Electronics to a completely full auditorium with 200 additional standing attendees. Dr. Woo has a history with DAC; winning the best paper award at DAC in 1994. Dr. Woo’s talk looked at the impact of smart mobile devices, 3 technical problems with solutions, and some challenges for the future. Dr. Woo stated that smart mobile devices are driving today’s semiconductors; it’s no longer PCs. Today’s mobile phones are multimedia application tools that can make calls. It’s hard to believe, but Apple’s iPhone launched 5 years ago (James Bruce’s blog reminds us how simple it was), while Samsung’s Galaxy phone powered by Exynos launched only 3 years ago. Smartphones are still a young field. According to Dr. Woo, typical smartphones have over a dozen chips (95% of which are ARM-based.) With the increased use of mobile applications, phones are driving higher computing and bandwidth requirements.

Overcoming space, applications and battery obstacles in mobile devices

Dr. Woo followed with presenting 3 technical problems (with solutions) for mobile phones: space (integration), applications (compute power,) and battery and heat problem (low power/thermal.) Space is being addressed with integration. The speed of development has increased 2x in recent years. Now a new node is introduced every year. Applications are being addressed by increasing computing power with new generations of ARM processors. For the latest generation Exynos Octa processor, Samsung selected ARM’s big.LITTLE^TM processing technology (video). Smart mobile devices will still be drivers for semiconductors with more and better applications, such as biometrics. Finally, Samsung is addressing the battery and heat problems with advancements with low power (including ARM’s physical IP) and thermal technology.

Challenges to be solved

Dr. Woo continued with some challenges that have yet to be solved. Are we achieving true SOC? No, we have a system of dozens of chips. Can the industry address with flexible ICs and PCB? What about chip on plastic? What about system on display? How can the advantages of flexible display be realized? Dr. Woo concluded with saying that EDA and Semiconductors have been doing a great job together to create smart mobile devices. Dr. Woo looks forward to solving these new challenges together. Richard Goering also covered this keynote.
…

Samsung Now Mass Producing Industry’s Fastest Embedded Memory [July 26, 2013]

… Featuring an interface speed of 400 megabytes per second (MB/s), the lightning-fast eMMC PRO memory provides exceptionally fast application booting and loading. The chips will enable much faster multi-tasking, web-browsing, application downloading and file transfers, as well as high-definition video capture and playback, and are highly responsive to running large-file gaming and productivity applications. … Samsung’s eMMC PRO memory chips, being produced in 16, 32 and 64GB versions, are based on Samsung 64Gb 10nm class* NAND flash technology. The new Samsung chips support the eMMC version 5.0 standard now nearing completion at JEDEC – the largest standards-setting body in the microelectronics industry. … As the fastest eMMC devices at more than 10 times the speed of a class 10 external memory card (which reads at 24MB/s and writes at 12MB/s), the new mobile memory greatly enhances the movement from one application to another in multitasking activities. …

Samsung Now Producing Industry’s Highest Density (3GB) LPDDR3 Mobile Memory for Smartphones [July 24, 2013]

… today announced the industry’s first mass production of three gigabyte (GB) low power double data rate 3 (LPDDR3) mobile DRAM, the highest density mobile memory solution for next-generation smartphones, which will bring a generation shift to the market from the 2GB packages that are widely used in current mobile devices.

The Samsung 3GB LPDDR3 mobile DRAM uses six of the industry’s smallest 20-nanometer (nm) class* four gigabit (Gb) LPDDR3 chips, in a symmetrical structure of two sets of three chips stacked in a single package only 0.8 millimeters high. With a full line-up of package dimensions, Samsung’s new ultra-slim memory solutions will enable thinner smartphone designs and allow for additional battery space, while offering a data transfer speed of up to 2,133 megabits per second (Mbps) per pin.

…

With the increased mobile DRAM capacity, users can enjoy seamless high-quality, Full HD video playback and faster multitasking on their smartphones. Also, the new LPDDR3 speeds up data downloading and is able to offer full support for LTE-A (LTE Advanced) service, a next-generation mobile telecommunication standard.

Samsung’s 3GB LPDDR3 DRAM connects with a mobile application processor using two symmetrical data transfer channels, each connected to a 1.5GB storage part. Though asymmetric data flow can cause sharp performance dips at certain settings, the symmetrical structure avoids such issues, while maximizing system level performance.

Considering that the current memory storage capacity for PCs is about 4GB, offering 3GB of DRAM memory on mobile devices should help most users enjoy PC-like performance, in narrowing the performance gap between PC and smartphone computing. With the new 3GB LPDDR3 DRAM, Samsung is now offering the widest range of mobile DRAM densities (1GB, 2GB and 3GB), while providing the industry’s first mobile DRAM based on 20-nm class process node technology. Samsung plans to continue to lead the growth of the mobile memory market, as it seeks to maintain unrivaled competitiveness in the premium memory sector.

Samsung Samples Industry’s First 16-Gigabyte Server Modules Based on DDR4 Memory technology [July 3, 2012]

Samsung Electronics Co., Ltd., the world leader in advanced memory technology, today announced that it has begun sampling the industry’s first 16-gigabyte (GB) double data rate-4 (DDR4), registered dual inline memory modules (RDIMMs), designed for use in enterprise server systems.

“By launching these new high-density DDR4 modules, Samsung is embracing closer technical cooperation with key CPU and server companies for development of next-generation green IT systems,” said Wanhoon Hong, executive vice president, memory sales & marketing, Samsung Electronics. “Samsung will also aggressively move to establish the premium memory market for advanced applications including enterprise server systems and maintain the competitive edge for Samsung Green Memory products, while working on providing 20 nanometer (nm) class* based DDR4 DRAM in the future.”

Using 30nm-class* process technology, Samsung sampled new 8GB and 16GB DDR4 modules in June, in addition to providing them to major CPU and controller makers. The modules will bring the highest density and performance levels to premium enterprise server systems. Samsung previously introduced the industry’s first 30nm-class 2GB DDR4 module in December, 2010.

Employing new circuit architecture for computing systems, DDR4 technology boasts the highest performance among memory products available for today’s computing systems, which by next year will reach twice the current 1,600 megabits per second (Mbps) of DDR3 based modules. Also, by processing data far more efficiently at a mere 1.2 volts, Samsung’s DDR4 modules will reduce power consumption by approximately 40 percent compared to its predecessor DDR3 modules operating at 1.35V.

Samsung will keep working on completion of the JEDEC (Joint Electron Device Engineering Council) standardization of DDR4 technologies and product specifications, which is expected to be accomplished by August.

The company said it will work closely with its customers including server OEMs, as well as CPU and controller makers, to expand the market base for high-density DDR4 modules, of which it plans to begin volume production next year. It also is set to expand the overall premium memory market with its most advanced 20nm-class based DDR4 DRAM products, which will be available sometime next year at densities up to 32GB.

Samsung has been leading the advancement of DRAM technology ever since it developed the industry’s first DDR DRAM in 1997. In 2001, it introduced the first DDR2 DRAM, and in 2005, announced the first DDR3 using 80nm-class* technology. For more information about Samsung Green memory, visit www.samsung.com/GreenMemory

* Editors’ Note : 20nm-class means a process technology node somewhere between 20 and 29 nanometers, and 30nm-class means a process technology node somewhere between 30 and 39 nanometers, while 80nm-class means a process technology node somewhere between 80 and 89 nanometers.

From: Samsung DDR4 SDRAM: The new generation of high-performance, power-efficient memory that delivers greater reliability [brochure, July 17, 2013]

…
Samsung DDR4 is an optimized solution for highly virtualized environments, high-performance computing and networking. Semiconductor modules of Samsung DDR4 are designed with new system circuit architecture to deliver higher performance with low power requirements than previously available memory products.

The Samsung portfolio of DDR4-based modules using 20nm-class process technology includes registered dual inline memory modules (RDIMMs) and load-reduced DIMMs

(LRDIMMs). These memory modules are available with initial speeds up to 2400 Mbps, increasing to the Joint Electron Devices Engineering Council (JEDEC)-defined 3200 Mbps.

The portfolio includes the following modules:

• 8 GB DDR4 RDIMMs

• 16 GB DDR4 RDIMMs

• 32 GB DDR4 RDIMMs and LRDIMMs

• 64 GB DDR4 LRDIMMs

• 128 GB DDR4 LRDIMMs

…

From: DRAM Market Grows Up; Industry’s Newfound Maturity Yields Growth Amid Adversity [IHS press release, June 19, 2013]

… After DRAM wafer output peaked in 2008 at 16.4 million 300-millimeter-equivalent wafers, production is expected to decline by 24 percent to 13.0 million this year, according to an IHS DRAM Dynamics Market Brief from information and analytics provider IHS (NYSE: IHS).

The projected cut will be the second straight year of deliberate downsizing following an 8 percent drop-off last year. This year’s output is expected to be slashed by 5 percent compared to 2012, as shown in the attached figure.

… Nearly 65 percent of all DRAM bit shipments went to a desktop or laptop 10 years ago, but that figure is less than 50 percent today and will fall further to south of 40 percent by the end of next year.

Meanwhile, servers and mobile gadgets like smartphones and tablets command an increasing share of DRAM bit shipments.

… The Taiwanese are no longer the powerhouse suppliers they used to be, while notable DRAM makers Qimonda of Germany and Elpida Memory of Japan have gone bankrupt and have been bought out by other players. By the end of this year, only three DRAM manufacturers will remain—Samsung and SK Hynix of South Korea, and U.S.-based Micron Technology. With fewer entities to influence the market, a more conservative approach toward capacity expansion is expected, and more stable growth can follow.

A final factor helping the global DRAM business is the slower pace of advancement in DRAM manufacturing processes. Each new generation of DRAM manufacturing technology is now taking longer to arrive.

The engineering challenges associated with shrinking DRAM size smaller than 30 nanometer [the 20nm class]— and eventually below 20 nanometer [the 10nm class]—are considerable.

The slowing cadence in manufacturing process evolution is resulting in slower bit growth, which is keeping supply in better balance with demand.
…

Samsung Brings Enhanced Mobile Graphics Performance Capabilities to New Exynos 5 Octa Processor [July 23, 2013]

Samsung Electronics Co., Ltd., a world leader in advanced semiconductor solutions, today introduced the latest addition to the Exynos product family with top level of graphic performance driven by a six-core ARM® Mali™-T628 GPU processor for the first time in the industry. With mobile use case scenarios becoming increasingly complex, Samsung’s newest eight-core ARM Cortex™ application processor gives designers a powerful, energy efficient tool to build multifaceted user interface capabilities directly into the system architecture. Samsung will demonstrate the new Exynos 5 family at SIGGRAPH 2013 in the ARM booth, #357; Exhibit Hall C at the Anaheim Convention Center.

Samsung’s new Exynos 5 Octa (product code: Exynos 5420), based on ARM Mali™-T628 MP6 cores, boosts 3D graphic processing capabilities that are over two times greater than the Exynos 5 Octa predecessor. The newest member of the Exynos family is able to perform General-Purpose computing on Graphics Processing Units (GPGPU) accelerating complex and computationally intensive algorithms or operations, traditionally processed by the CPU. This product also supports OpenGL® ES 3.0 and Full Profile Open CL 1.1, which enables the horsepower needed in multi-layer rendering of high-end, complex gaming scenarios, post-processing and sharing of photos and video, as well as general high-function multi-tasking operations.

“ARM welcomes the latest addition to the successful Exynos Octa 5 series, which uses ARM’s Mali GPU solution to dramatically improve graphics performance,” said Pete Hutton, executive vice president & general manager, Media Processing Division, ARM. “ARM big.LITTLE™ and ARM Artisan® Physical IP technologies continue to be at the heart of the Octa series and now complement the new functionality brought by ARM GPU Compute. This combination enables unprecedented capabilities in areas such as facial detection and gesture control, and brings desktop-quality editing of images and video to mobile devices.”

“Demand for richer graphic experiences is growing rapidly nowadays,” said Taehoon Kim, vice president of System LSI marketing, Samsung Electronics. “In order to meet that demand from both OEMs and end users, we developed this processor which enables superb graphical performance without compromising power consumption.”

The newest Exynos processor is powered by four ARM Cortex®-A15™ processors at 1.8GHz with four additional Cortex-A7™cores at 1.3 GHz in a big.LITTLE processing implementation. This improves the CPU processing capability by 20 percent over the predecessor by optimizing the power-saving design.

In addition, the mobile image compression (MIC) IP block inside this System-on-Chip successfully lowers the total system power when bringing pictures or multimedia from memory to display panel. This feature results in maximizing the usage hours of mobile devices with a high-resolution display such as WQXGA (2500×1600), in particular when browsing the web or doing multimedia application requiring the frequent screen refresh.

The new Exynos 5 Octa processor also features a memory bandwidth of 14.9 gigabytes per second paired with a dual-channel LPDDR3 at 933MHz, enabling an industry-leading fast data processing and support for full HD Wifi display. This new processor also incorporates a variety of full HD 60 frames per second video hardware codec engines for 1080p video recording and playback.

The new family of Exynos 5 Octa is currently sampling to customers and is scheduled for mass-production in August.

Samsung SSD 840 Evo – @2013 Samsung SSD Global Summit in Seoul [Notebookitalia YouTube channel, July 18, 2013]

Samsung Unveils New Solid State Drives at its Annual SSD Global Summit [July 18, 2013]

New High-speed 1TB SSD to expedite transition to SSDs

… Samsung unveiled new high-performance, high-density SSDs that offer over 1TB memory storage. Among the highlights were the 840 EVO, a consumer-oriented entry-level, high-performance SATA based SSD offering up to 1TB, and the XS1715, an ultra-fast NVMe* SSD for enterprise storage use offering up to 1.6TB.

As part of its strategy to expand into the consumer market and further popularize SSDs, Samsung plans to initially introduce the Samsung SSD 840 EVO to major global markets in early August. Samsung will expand into additional markets at a later date.

The new Samsung SSD 840 EVO line-up makes use of the industry’s most compact 10-nanometer class** 128Gb high-performance NAND flash memory, which Samsung began mass producing in April. With these chips and Samsung’s proprietary multi-core controller, the Samsung SSD 840 EVO achieves unrivaled value for performance with improved sequential read and write speeds.

In addition, Samsung has developed the XS1715, the industry’s first 2.5-inch NVMe SSD line-up. This device will expand Samsung’s market base for enterprise SSDs, and the company will make them available in the second half of this year.

The new NVMe SSD XS1715 delivers random read performance that is over 10 times faster than Samsung’s former high-end enterprise storage SSD. The new NVMe SSD utilizes both the PCIe 3.0 interface, which is approximately two times faster than the PCIe 2.0 interface, and NVM express technology which accelerates the SSD’s overall speed. …

Samsung Now Mass Producing Industry’s First PCI-Express SSD for Ultra-slim Notebook PCs [July 17, 2013]

Samsung Electronics Co., Ltd. … has begun mass producing the industry’s first PCI-Express (PCIe) solid state drive (SSD) for next-generation ultra-slim notebook PCs. … Samsung started providing the new SSD to major notebook PC makers earlier this quarter. The XP941 lineup consists of 512, 256 and 128GB SSDs. … Samsung intends to continuously expand its production volumes of high-performance 10-nanometer class* NAND flash memory, in helping the company to maintain its lead in PCIe SSDs for ultra-slim PCs and notebook PCs. Furthermore, Samsung plans to introduce next-generation enterprise NVMe SSDs in a timely manner to also take the lead in that high-density SSD market, adding to its competitive edge.

Samsung Now Producing High-Performance SSD for Enterprise Servers and Data Centers [May 21, 2013]

… SM843T, for use in high-performance servers and storage in next-generation data centers, including Big Data systems. … strengthens Samsung’s SATA interface enterprise SSD product lineup. Offering up to 960 gigabytes (GB) of memory storage for faster and more efficient Big Data systems and cloud computing environments, the SM843T offers the industry’s most advanced performance level for SATA 6.0 SSDs. … IT managers will see a performance gain of 6 times and energy savings of 30 percent over the widely-used hard disk drives, enabling sharply improved system-level performance and greater energy efficiency at the same time.

… Through mass production of the SM843T, Samsung’s competitive edge in the advanced PC market has expanded into the high value-added enterprise SSD market with the company providing highest quality solutions to its customers. … According to IHS iSuppli, the global SSD market is expected to reach approximately USD 10 billion in revenues by the end of 2013, a 43 percent increase over the previous year, led by sales of enterprise SSDs which it expects will account for approximately 47 percent of the market in 2013.

From: SM843T Data Center Series: Data Center MLC-class SSD High-Performance, Consistently Low Latency and Extreme Write Endurance [Brochure, May 21, 2013]

Samsung has released the SM843T SSD, utilizing consumer 20nm-class MLC NAND Flash, which features consistently low latency, high write endurance, power-loss protection, coupled with a high-level of sustained writes (IOPS)—all at capacitates up to 960GB at an extremely affordable solution. Here are more details about his new drive’s outstanding features:

Exceptional Low Latency and High Write Endurance
…
Enterprise Power-Loss Protection
…
High-Capacity SSDs Available
…
A Workhorse of a Drive
The Samsung SM843T is optimized for sustained random read and write workloads (98,000 IOPS/15,000 IOPS). This represents a 6x increase in write IOPS, in the same price category, as our last generation, award-winning PM830 SSDs.

Samsung Now Producing Four Gigabit LPDDR3 Mobile DRAM, Using 20nm-class Process Technology [April 30, 2013]

Samsung Electronics Co., Ltd., the world leader in advanced memory technology, today announced the industry’s first production of ultra-high-speed four gigabit (Gb) low power double data rate 3 (LPDDR3) mobile DRAM, which is being produced at a 20 nanometer (nm) class* process node.

The new 4Gb LPDDR3 mobile DRAM enables performance levels comparable to the standard DRAM utilized in personal computers, making it an attractive solution for demanding multimedia-intensive features on next-generation mobile devices such as high-performance smartphones and tablets.

… According to market research firm, Gartner, the DRAM market is forecast to grow by 13 percent year-over-year to reach $29.6 billion (US) in 2013, with mobile DRAM to exceed $10 billion in sales, for 35 percent of the total DRAM market.

Samsung Mass Producing High-Performance 128-gigabit 3-bit Multi-level-cell NAND Flash Memory [April 11, 2013]

Samsung Electronics Co., Ltd. … announced today that it has begun mass producing a 128-gigabit (Gb), 3-bit multi-level-cell (MLC) NAND memory chip using 10 nanometer (nm)-class* process technology this month. The highly advanced chip will enable high-density memory solutions such as embedded NAND storage and solid state drives (SSDs). … Samsung started production of 10nm-class 64Gb MLC NAND flash memory in November last year, and in less than five months, has added the new 128Gb NAND flash to its wide range of high-density memory storage offerings. The new 128Gb chip also extends Samsung’s 3-bit NAND memory line-up along with the 20nm-class* 64Gb 3-bit NAND flash chip that Samsung introduced in 2010. Further, the new 128Gb 3-bit MLC NAND chip offers more than twice the productivity of a 20nm-class 64Gb MLC NAND chip. …

President Park calls on Korean companies to participate in China’s western development project [arirangnews YouTube channel, June 30, 2013]

---

Regarding the #2 capex beneficiary, the Display Panel Segment (or as traditionally called: Samsung Display), we know the following:

From: Samsung bolsters OLED display biz [The Korea Times, July 22, 2013]

… The company currently dominates the global demand for small- and medium-sized OLED screens because it supplies such screens to Samsung Electronics, the world’s biggest smartphone manufacturer.

But the situation is different in the large-sized TV OLED screen segment. Its biggest rival, LG Display, is catching up by boosting its price-competitive white-based OLED technology.

Major TV manufacturers are also shifting their focus to OLED TVs, which have better profit margins than the currently popular LCD TVs.

In a statement to The Korea Times, Kim Ho-jung, senior manager of Samsung Display’s communication team, said that the firm’s so-called zero-pixel defect OLED (ZPD OLED) screens are better than those of rivals in terms of picture quality and customer value.

“As the world’s most-trusted TV manufacturer, Samsung was consistent in developing technologies. We are confident we will get tangible results by pushing for ZPD OLED screens. The displays have received a warm response both from individual and business clients,” said Kim.

The manager said that the firm has been adjusting panel designs and applying an advanced processing technology to address technological problems such as contamination control. Addressing such problems is key to OLED screens because of their complexity. …

… The company will order equipment from local manufacturers for its third OLED plant, A3. The plant will use sixth-generation glass-cutting technology to produce displays.

Samsung plans to produce OLED screens in this new plant for both tablets and TVs. The plant will go online during the first half of next year, market analysts expect.

They said Samsung Display will thrive because OLED applications will continue to increase, especially as Samsung Electronics releases new product variants using OLED screens. …

Samsung Display to commercialize ‘unbreakable display’ this year [MK News, May 15, 2013]

As early as the fourth quarter of this year, consumers may see a new smartphone whose display is unbreakable when it falls onto the floor. It marks the beginning of an age of flexible displays.

According to industry sources Wednesday, Samsung Display and Samsung Corning Precision Materials successfully developed an unbreakable display early this year and enter into commercial production in the second half of this year. This new display is likely to be used for Samsung’s new strategic smartphone Galaxy Note 3 to be released late this year.

To date, the smartphone display is made from glass, which can be easily broken. To resolve this, Samsung Display developed plastic AMOLED and Samsung Corning released a film-coated display with increased durability.

Consumers tend to be less attentive to the glass part of their smartphone and this is easily broken when it falls, but there will be no worry of this new display is available, an industry source noted.

Plastic materials will also contribute to making lighter smartphones. Plastic AMOLED weighs just one third that of LCD and one half that of conventional AMOLED. The display part accounts for about half of the weight of a smartphone device, causing companies to focus on lighter design.

“Galaxy Note 3” to feature Qulacomm chip, 5.7” screen [MK News, July 25, 2013]

The “Galaxy Note 3,” Samsung’s ambitious work slated for debut in the second half (H2) of this year, will feature a 5.7-inch display. The device will also come with Qualcomm’s mobile application processor “Snapdragon 800,” which runs on LTE-A service, offering twice the speed of LTE.

A knowledgeable source for Samsung Electronics noted, “Samsung had fine-tuning procedures over the specifications of the Galaxy Note 3, which will come to the market in September,” adding “the Galaxy Note 3 will arrive with a 5.7-inch screen, contradicting the earlier rumored 5.99-inch screen”

Samsung Electronics initially designed the Galaxy Note 3 with a 5.99-inch display, but decided to roll out the device with a 5.7-inch screen taking into account the market response to its phablet Galaxy Mega (6.3 inch/5.8 inch). The Galaxy Note series are evolving with wider screens of 5.3, 5.5 and 5.7-inch. The Galaxy Note 3 will offer a screen that seems to be as wide as six-inch, by utilizing the bezel technology like the five-inch “Galaxy S4.”

With the beginning of the LTE-A era, there will be a change in the application processor (AP) that the Galaxy Note 3 will be equipped with. The Galaxy Note 3 to be released in the LTE-available nations will carry Qualcomm Snapdragon 800 instead of Exynos 5 Octa.

Samsung reportedly will reveal the Galaxy Note3 at Berlin’s IFA 2013 conference in September.

But on the same day 갤노트 3, 휘는 폰으로 낼까 말까? article Asian Economy:

The Samsung Galaxy Note 3 to be released in September with  plastic organic light-emitting diode (OLED) is struggling whether to mount with that or not. Originally equipped with plastic OLED Galaxy Note 3 is developing problems such as yield, but unto the end of August, it is expected to be finalized for deployment. There are 25 days, according to the industry, for the Samsung Galaxy Note 3 to decide whether the plastic OLED could be mounted or not. …

The major attraction of this business segment was last touted in AMOLED Displays to Have Major Influence on Innovation in the Cloud Computing Era [BusinessWire, May 21, 2013]

AMOLED Displays to Have Major Influence on Innovation in the Cloud Computing Era

“In the cloud computing era, AMOLED displays are most likely to have the greatest amount of influence on innovation in smart devices.” Kinam Kim, CEO of Samsung Display, delivered this statement as part of a keynote speech on “Display and Innovation” to attendees at the Society for Information Display’s Display Week 2013 in the Vancouver Convention Centre today.

During the keynote speech, Mr. Kim said that the future of displays will change considerably, with special attention to be given for the virtually infinite number of imaging possibilities in AMOLED (Active Matrix Organic Light Emitting Diode) display technology.

Mr. Kim emphasized that three evolving “environments” are likely to make displays the central focus of the increasingly pervasive use of electronic devices.

The first environment is the spread of cloud computing. In the cloud environment, the capability of electronic networked devices for data processing and storage will be extended infinitely, allowing users everywhere to easily enjoy content that only highly advanced devices can fully process today, including ultra HD (3840 x 2160) images and 3D games. Higher levels of display technology will be required to support our increasing reliance on the cloud.

The second environment is the accelerating evolution of high-speed networks. By 2015, the velocity of 4G LTE will rise to 3 gigabits per second (Gbps), so the transmission time for a two-hour UHD-resolution movie will be under 35 seconds. Mr. Kim said, “As image quality of video content improves, larger and even more vibrant displays will emerge as a key differentiating point in mobile devices.”

The third environment is the spread of connectivity among electronic devices. As the use of Wi-Fi networks explodes, the N-Screen era is on its way. A massive network environment will be established by connecting not only smartphones and tablet PCs but also automobiles, home appliances and wearable computing devices. Due to this explosion in “data flow,” there will be a huge surge of interest in touch-enabled displays.

Mr. Kim said that the innovative advantages of AMOLED technology will allow consumers to realize more possibilities in electronic convenience than we might have ever imagined.

The first innovative advantage of AMOLED, according to Mr. Kim, is the superiority of its color. AMOLED displays can embody true colors closest to natural colors with their color space 1.4 times broader than that of LCD displays. By offering the world’s broadest color gamut – supporting nearly 100% of the Adobe RGB color space, AMOLED will expand the range of displays well suited to printed media, where specialized color is frequently required.

The second innovative advantage of AMOLED is its flexibility and transparency. AMOLED displays can maximize portability by making devices foldable and rollable, and they can also lead innovation in product designs with advantages in curved forms, transparent panels, and lighter weight than other display technologies.

The third innovative advantage of AMOLED displays will be their responsiveness to touch and sensors for detecting all five human senses. Using Samsung’s new Diamond Pixel™ technology, which has been optimized for the human retina, AMOLED displays can now depict natural colors and images with super high resolution.

Mr. Kim went on to say that display applications, with advantages of AMOLED technology, will rapidly spread throughout other business sectors like the automotive, publishing, bio-genetic and building industries.

In the automotive business, AMOLED displays will replace conventional glass and mirrors that have been used for digital mirrors and head-up displays. Capitalizing on their advantages with flexibility, durability and high resistance to temperature changes, AMOLED display panels also will be used for watch displays and for products in the fashion and health care market sectors. Further, in publication and building, AMOLED displays will set the trend for the building market sector with AMOLED architectural displays in and outside buildings being used as highly desirable decorative and information-delivering products.

Mr. Kim expressed confidence that “The display market is unlimited in the amount of growth that it can achieve, as technical innovation continues to accelerate.” And he added that “Samsung Display will play a leading role in the global display industry, as the display company possessing the most advanced AMOLED technology.”

Samsung Curved OLED TV commercial 삼성전자 곡면 OLED TV [n35a2 YouTube channel, July 3, 2013]

Then there are the latest technology advances with Samsung Display Showcasing State-of-the-Art Mobile to Extra-Large-Sized Displays at Display Week 2013 [BusinessWire, May 20, 2013]

Display Week 2013

VANCOUVER, British Columbia–(BUSINESS WIRE)–Samsung Display announced today that it is showcasing several industry-leading technologies and mobile to extra-large-sized display prototypes at the Society for Information Display’s Display Week 2013, May 21-23, 2013, in the Vancouver Convention Centre (Booth 700). These include a Full HD (1920×1080) mobile AMOLED display with the world’s broadest color gamut, and an 85-inch Ultra HD (3840×2160) LCD TV panel with extremely vivid color and low power consumption.

In addition, Samsung Display shows a unique new Diamond Pixel™ technology being highlighted at the show, and a featured LCD technology that enables local-dimming control in direct LED-based LCD panels.

The world’s first mass-produced 4.99-inch Full HD mobile AMOLED display offers the world’s broadest color gamut with a 94 percent average rate of reproduction for the Adobe RGB color space. The Adobe RGB standard is about 30 percent broader than general sRGB standards.

Samsung Display fulfills the most advanced mobile AMOLED display demands with its Diamond Pixel™ technology. This technology, based on the idea that the human retina reacts more to green than other colors, places more green than red and blue pixels in the pixel structure of AMOLED display panels.

With the new technology, Samsung’s Full HD AMOLED display can provide text messages 2.2 times clearer than HD (1280×720) displays. So, when curvilinear letters on the panel are magnified two or three times, Samsung’s Diamond Pixel™ technology enables text to be reproduced more smoothly (fewer “jaggies”) and accurately than those produced with conventional LCD technology.

Samsung Display is also providing Display Week participants with firsthand experience comparing the color gamut, color accuracy and letter quality of Full HD AMOLED displays in a special “experience zone” within its booth. The booth will provide a clear comparison between AMOLED and LCD displays. Attendees can see not only true crisp colors in the intricate wing pattern of morpho butterfly images, but can also view an image of a strand of knitting wool so detailed that it can only be appreciated using a Full HD AMOLED display.

Furthermore, Samsung Display’s exhibit of an 85-inch ultra HD TV panel showcases a LCD technology that enables local-dimming control in a direct LED-based LCD panel. The panel can save 30 percent of typical LED BLU power consumption. Its local-dimming control enables vivid color rendering including incredible black images, 80 percent brightness uniformity, and a remarkably-enhanced contrast ratio.

For the latest in green technology, Samsung Display is highlighting advanced power-saving solutions for smart mobile devices including smartphones and tablets. Here, Samsung Display has innovatively reduced power consumption of AMOLED display by enhancing the luminous efficacy of AMOLED pixels. Samsung Full HD AMOLED displays provide a 25 percent power-savings over that of existing HD AMOLED displays.

Samsung Display is also exhibiting a 10.1-inch WQXGA (2560 x 1600) LCD for tablets and a 13.3-inch WQXGA+ (3200 x 1800) LCD for notebooks, which each can deliver 30 percent greater power-savings than that of existing LCD tablet displays, by decreasing the number of driver circuits and increasing the efficiency of the LED BLU.

Also, Samsung is spotlighting a 23-inch multi-touch LCD display that can detect 10 touch points simultaneously. The prototype enables playing of the piano with exceptional finesse, or drawing a highly detailed picture on a monitor or a tablet.

About Samsung Display Co., Ltd.

Samsung Display Co., Ltd. is a global leader in display panel technology and products. Employing approximately 39,000 people at seven production facilities and nine sales offices worldwide, Samsung Display specializes in high-quality displays for consumer, mobile, IT and industrial usage, including those featuring OLED (organic light emitting diode) and LCD technologies. As a total solution provider, Samsung Display strives to advance the future with next-generation technologies featuring ultra-thin, energy-efficient, flexible, and transparent displays. For more information, please visit www.samsungdisplay.com.

End of Updates

Praise from competing Taiwan attributing 30 years of Samsung’s well continued success in the “classic” high-tech component space of DRAMs to nothing else than the exceptional “talent management” practice, the cornerstone of the “New Management” introduced in 1993: The lesson to be learned from Samsung: Q&A with Inotera chairman Charles Kau [DIGITIMES, June 27, 2013], you can read the full interview in the end of this post

Q: The failure of Taiwan’s DRAM industry has somehow deepened local makers’ hostility against Samsung Electronics. What is your comment on Samsung?

My own insert here: “[1:10] The efforts and determination with ongoing enourmous investment have made Samsung the world’s leader in memory chip production since early days of 64K DRAM. [1:22]” from Samsung Electronics – Semiconductor Promotional Video 1997 [DatasheetArchiveLtd YouTube channel] below in order to show that the company’s high-tech lead was achieved before “New Management” (DRAM history info is from Samsung), although it was possible to continue only because of that, should be added here as well:

Sidenote #1: With this 256Mb DRAM chip Samsung was able to surge ahead of the Japanese in the same way as those were able to beat Intel, actually forcing Intel out of the DRAM business. See: It’s a Strategic Inflection Point [‘USD 99 Allwinner’, Dec 1, 2012]. If Samsung “New Management” had not been introduced in 1993 Samsung quite probably had been overtaken by the eager Taiwaneese DRAM manufacturers, in the same way as it happenned to Intel, and then to Japanese manufacturers. If you read the full interview in the end of this post you will understand the kind of “failure” of  the whole Taiwanese DRAM industry in its entirety.

A: Many think that Samsung’s achievements rely on support from Korea’s government. But that is only half right. Indeed, Samsung did receive a large amount of government aid prior to 2000, but it has continued to strive after 2000 optimizing its management efforts under company chairman Lee Kun-hee.

Lee has stressed on cultivating its own pool of talent, considering it the most valuable asset of the company. But in Taiwan, most businesses have been focusing on how to reduce production costs and have ignored the value of talent.

Instead of devising measures to fight or compete against Korea companies, Taiwan companies should figure out how Samsung can become as powerful as it is today. After all, we should respect Samsung for its long-term efforts to cultivate its talent, and the way it treats talent – the people who have created the value of Samsung.

Thy typical Western view is not as mature as the Taiwanese one, with statements like “Samsung is a fast follower” in Samsung’s Secret Sauce: A Bloomberg Exclusive [Bloomberg YouTube channel, March 28, 2013], although recognizing Lee Kun-hee’s role

In fact there were 20 years (see later) of relentless talent management and design innovation, two core elements of Samsung’s global success: watch the Samsung PREMIERE 2013 GALAXY & ATIV Highlights June 20 event video as the latest “demonstration” of the “results” [SamsungTomorrow YouTube channel, June 24, 2013]

Sidenote #2:  Samsung Unifies Best-in-Class Windows PCs Under Newly Expanded ATIV Brand [Samsung Mobile Press release, April 25, 2013] i.e. “… expanding the ATIV brand to include its leading Windows® -based PCs. ATIV, previously the brand for the company’s Smart PC Windows-based hybrid devices, now represents the convergence of PC and mobile technologies and unites all of Samsung’s Windows PCs and devices under one cohesive brand. In tune with the needs and wants of today’s evolving consumers, the Samsung ATIV line offers a variety of market leading Windows PC devices designed to extend the mobile experience from your handset to laptop and vice versa, making work more seamless and life more convenient.” ATIV actually is coming from “CreATIV –> OriginATIV –> InnovATIV” (with the last letter “e” omitted as it is not pronounced either).

Then watch these technology videos in order to understand Samsung stance in areas which will be most critical for its ATIV effort (as its GALAXY effort is already a huge success):
– Samsung ATIV Q Hands On – Windows 8/Android Convertible Ultrabook [minipcpro YouTube channel, June 20, 2013]

– [Samsung ATIV] SideSync Introduction [SamsungNotebook YouTube channel, May 9, 2013]

– Introducing Samsung HomeSync Lite [SamsungNotebook YouTube channel, July 1, 2013]

– [MWC2013] Samsung HomeSync Presentation [SamsungTomorrow YouTube channel, Feb 26, 2013]

Next watch the details of the June 20 representative event in order to discover every aspect of Samsung innovations there: Samsung PREMIERE 2013 London (Full Version)
[SamsungTomorrow YouTube channel, recorded June 20, published June 24, 2013]

And here is a recent background article about those 20 years mentioned earlier:
Talent, design lead Samsung’s success [The Korea Times, June 20, 2013]

Kevin Lane Keller from Tuck School of Business, Dartmouth College, the United States, delivers a keynote speech during a forum organized to highlight the success of Samsung Group over the past two decades since chairman Lee Kun-hee declared his “New Management” philosophy in 1993, at The K-Hotel in southern Seoul, Thursday. / Courtesy of Samsung Group

Experts advise technology giant to focus more on marketing

Talent management and design innovation are two core elements that have spurred Samsung’s successful transformation into a global player over the past two decades, according to global business experts, Thursday.

They pointed out that Samsung’s future depends upon how it will improve marketing strategies and combine a new breed of software and hardware.

Such analysis came at an International Forum billed as “Twenty years of Samsung’s New Management” organized by The Korean Academic Society of Business Administration at The K-Hotel, southern Seoul.

Under the slogan “New Management,” Samsung Electronics Chairman Lee Kun-hee declared his goal  in Frankfurt, Germany, in 1993, of shifting toward quality-focused growth not quantity-highlighted expansion. Lee then ordered employees to change everything but their wives and children.

“Samsung was a true transformer over the last 20 years in a very positive way. Its business transformation is a model for all modern multinationals and the transformation well illustrates the competitive advantage that form a strong link between business strategy and people strategy,” said Patrick M. Wright, bicentennial chair of the Darla Moore School of Business at the University of South Carolina, during the forum.

He cited talent assessment and review programs as one crucial part behind Samsung’s success.

“Samsung’s transformation has had people at the center. The human resources function at Samsung has played a critical role in enabling this transformation. The human resources system has developed to enable the transformation of the New Management that has constantly evolved to meet new challenges and achieve new objectives,” Wright said.

The scholar said that New Management was supported by strategy execution by top Samsung management.

“New human capital pools require new and different ways of attracting, developing, motivating and retaining those people. This requires human resources functions to design, develop and deliver human resources system and processes.”

“Samsung lets the core talent set the business goal rather than simply implementing the given goal. This creates more buy-ins, and makes the objectives more directly relevant to the situation,” the global human resources expert analyzed.

Amid the industry’s massive shift toward software, Samsung’s human resources head Won Ki-chan told The Korea Times that it has 36,000 software resources, globally, and added the firm is going to hire more, although the Samsung executive declined to elaborate further.

New Management also awakened the corporate for the importance of fine-tuned marketing strategies, said a marketing expert in the United States.

Kevin Lane Keller from Tuck School of Business, Dartmouth College, the United States, has given six marketing imperatives for better understanding of Samsung’s success story.

“Samsung puts a lot to design. Actually, it has a strong design philosophy. Samsung has developed creative ad campaigns, strong in-store programs and high-profile sponsorships,” said Keller, who is an international leader in the study of brands, branding and strategic brand management.

Emphasizing its consistency to launch new products to the time-to-markets, Keller said Samsung Electronics has been consistent in maximizing long-term growth by entering new markets. “This is the importance of innovation and relevance,” he said.

“Samsung has taken a big picture view of marketing effects and knew what’s working. It’s been achieving greater accountability for marketing investments in brands. Samsung was launching very clever marketing campaigns. Advertizing was another factor that lifted Samsung over the two decades.” 

In 1993, Samsung was just a small supplier that sold cheap home appliances and handsets. Now, it is the world’s biggest technology firm by revenue, and a leading brand consultancy, InterBrand, ranked it as the ninth global brand in 2012.

Challenges

Keller advised Samsung to improve marketing, further, in a highly-competitive consumer electronics market.

“Be a leader, tap even more into emotions and manage brand architecture carefully,” he said.

“Yes, this is a challenge. But Samsung overcame Sony and Apple and now has achieved firm leadership. Leadership isn’t something that shouldn’t be earned in a single day. But Samsung must keep being innovative and relevant,” he stressed.

According to the professor, Samsung must be confident in communications and bold in action, while the company needs to cultivate yearning to purchase and pride of ownership.

“My final advice is that Samsung needs to recognize the pros and cons of flagship products. Keep it simple and clear.”

Hiroshi Katayama, professor at Waseda University in Japan, has pointed out that the future of Samsung’s next decades will be dependent upon how it advances its supply chain management system and how the company will develop and implement effective transfer methods in between sites, business functions, business divisions and industries.

Kenn Allen, president at the Civil Society Consulting Group, has urged Samsung to show more willingness toward corporate citizenship-related programs, internationally, so long as to be recognized as a true global leader.

“Primary investment for corporate citizenship programs is in Korea, thus limiting global impact internally and externally. Corporate volunteering needs to be valued more,” Allen said.

Then another article on the same subject: Talent, High-Speed Decision-Making Lead Samsung’s Success [Korea IT Times, June 24, 2013]

SEOUL, KOREA – Talent-oriented management and high-speed decision-making have led Samsung Group’s remarkable success, a global business expert said.

At an international forum titled the “Twenty years of Samsung’s New Management” held at the K-Hotel in Yangjae-dong, Seoul on June 20, Hiroshi Katayama, a professor of Waseda University in Japan, said, “The characteristics of Samsung’s quality management are speed management, timing management, pursuing perfection, talent-oriented management, seeking synergy effects and exact insight of business nature.

“Samsung succeeded in removing unnecessary business process and being equipped with globally standardized development system, producing a rapid decision-making system.”

He also pointed out at the forum organized by the Korean Academic Society of Business Administration that the future of Samsung’s next decades will be dependent upon how it advances its supply chain management system and how the company will develop and implement effective transfer methods in between sites, business functions, business divisions and industries.

Under the slogan “New Management,” Samsung Electronics Chairman Lee Kun-hee declared his goal in Frankfurt, Germany, in 1993, of shifting toward quality-focused growth not quantity-highlighted expansion. Lee then ordered employees to change everything but their wives and children.

Meanwhile, Prof. Kevin Lane Keller of the Tuck School of Business, Dartmouth College, the United States, has given six marketing imperatives for better understanding of Samsung’s success story.

Keller, who is an international leader in the study of brands, branding and strategic brand management, said, “Samsung puts an emphasis on design. Actually, it has a strong design philosophy. Samsung has developed creative advertisement campaigns, strong in-store programs and high-profile sponsorships.”

Stressing its consistency to launch new products to the time-to-markets, Keller said Samsung Electronics has been consistent in maximizing long-term growth by entering new markets.

He said, “Samsung has taken a big picture view of marketing effects and knew what’s working. It has been achieving greater accountability for marketing investments in brands. Samsung was launching very clever marketing campaigns. Advertizing was another factor that lifted Samsung over the two decades.”

Keller advised Samsung to improve marketing further in a highly-competitive consumer electronics market, noting “Become a leader, tap even more into emotions and manage brand architecture carefully.”

The professor also said, “Samsung must be confident in communications and bold in action, while the company needs to cultivate yearning to purchase and pride of ownership. Samsung needs to recognize the pros and cons of flagship products. Keep it simple and clear.”

Prof. Song Jae-yong of Seoul National University said, “Samsung is giant, but it is a rapid organization. It is well diversified by field and boasts of top-class global competitiveness in each sector. Its most powerful strongpoint is its managerial system that has optimized merits of the Japanese and American-style managerial systems.”

Commenting that Samsung is equipped with the fastest response system in the world by securing global ERP and SCM management systems through massive investment, Song said, “Samsung is possible to develop new products at a faster pace than its global competitors as it has secured both finished products such as smartphone and TV and relevant parts, including semiconductor and display.”

At the forum, Patrick M. Wright, bicentennial chair of the Darla Moore School of Business at the University of South Carolina, also said, “Samsung was a true transformer over the last 20 years in a very positive way. Its business transformation is a model for all modern multinationals and the transformation well illustrates the competitive advantage that form a strong link between business strategy and people strategy.”

Noting that talent assessment and review programs are important reasons behind Samsung’s success, Wright said, “Samsung’s transformation has had people at the center. The human resources function at Samsung has played a critical role in enabling this transformation. The human resources system has developed to enable the transformation of the New Management that has constantly evolved to meet new challenges and achieve new objectives.”

Saying that New Management was supported by strategy execution by top Samsung management, the scholar said, “New human capital pools require new and different ways of attracting, developing, motivating and retaining those people. This requires human resources functions to design, develop and deliver human resources system and processes.”

In the meantime, Prof. Kim Seong-soo of Seoul National University, said, “Samsung’s personnel management system has become a foundation to lead new management philosophy and basic strategies. To effectively cope with rapidly changing managerial environment, Samsung has secured talents to lead the future management preemptively and changed market strategies frequently by using the accumulated human resources.”

Lee Kun-hee, Jae-yong make business trip to Japan, China

Samsung Electronics Chairman Lee Kun-hee and his son Jae-yong, vice chairman of the electronics maker, flew to Japan and China, respectively, on June 20.

The junior Lee left the Gimpo International Airport around 9:00 a.m. for Beijing, along with Kim Suk, CEO of Samsung Securities, and Lee Sang-hoon, head of the managerial support office of Samsung Electronics.

His business trip is designed to check Samsung’s local corporations and business offshoots in China ahead of President Park Geun-hye’s official visit to China from June 27-30.

President Park Geun-hye will meet Chinese President Xi Jinping on the first day of her visit to China. The summit is expected to play a crucial role in inter-Korean relations, which are showing signs of improving as the two are set to hold a minister-level meeting for the first time in six years. Beijing has a big say in Pyongyang as its main benefactor.

The vice chairman is also scheduled to visit the U.S. before returning home.

Meanwhile, Chairman Lee left the Gimpo International Airport around 10:00 a.m. for Japan. His overseas trip this time seems to seek a new business strategy beyond the New Management.

Finally what 2 years ago The Paradox of Samsung’s Rise article by Khanna.T, Song. J and Lee.K in the Harvard Business Review [July-August, 2011, pp. 142-147] found after seven years of tracing Samsung’s progress:

Samsung’s unlikely success in mixing Western best practices with an essentially Japanese business system holds powerful lessons for today’s emerging giants.

As today’s emerging giants face the challenge of moving beyond their home markets, they have much to learn from the pathbreaking experience of South Korea’s Samsung Group, arguably the most successful globalizer of the previous generation.

Twenty years ago, few people would have predicted that Samsung could transform itself from a low-cost original equipment manufacturer to a world leader in R&D, marketing, and design, with a brand more valuable than Pepsi, Nike, or American Express. Fewer still would have predicted the success of the oath it has taken. For two decades now, Samsung has been grafting Western business practices onto its essentially Japanese system, combining its traditional low-cost manufacturing prowess with an ability to bring high-quality, high-margin brands products swiftly to market.

The two sets of business practices could not have seemed more incompatible. Into an organization focused on continuous process improvement, Samsung introduced a focus on innovation. Into a homogeneous workforce, Samsung introduced outsiders who could not speak the language and were unfamiliar with the company’s culture. Into a Confucian tradition of reverence for elders, Samsung introduced merit pay and promotion, putting some young people in positions of authority over their elders. It has been a path marked by both disorienting disequilibrium and intense exhilaration.

Like Samsung, today’s emerging giants-Haier in China, Infosys in India, and Koc in turkey, for instance-face a paradox: Their continued success requires turning away from what made them successful. The tightly integrated business systems that have worked in their home markets are unlikely to secure their future in global markets. To move to the next level, they, too, must reinvent themselves in ways that may seen contradictory. And when they reach new plateaus, they will need to do so again.

For seven years, we have traced Samsung’s progress as it has steadily navigated their paradox to transcend initial success in its home markets and move onto the world stage. It is a story we believe holds many important lessons for the current generation of emerging giants seeking to do the same.

The rise of a World Leader

My own insert here: History of Samsung [cnetuk YouTube channel, Feb 20, 2012]

Founded in 1938, the Samsung Group is the largest corporate entity in South Korea, with $227.3 billion in revenue in 2010 and 315 thousand employees worldwide. Best known for its flagship, Samsung Electronics (SEC)-producer of semiconductors, cell phones, TVs, and LCD panels-the group’s highly diversified businesses span a wide range of industries, including financial services, machinery, shipbuilding, and chemicals.

By 1987, when Lee Kun-Hee succeeded his father as only the second chairman in the company’s history, Samsung was the leader in Korea in most of its markets. But its overseas position as a low-cost producer was becoming untenable in the face of intensifying competition from Japanese electronics makers, which were setting up manufacturing plants in Southeast Asia, and rising domestic wages in South Korea’s newly liberalizing economy.

In the early 1990s, Lee spotted an opportunity in the reluctance of Japanese companies-the analog markets leaders-to adopt digital technology, with consumers were flocking to in cameras, audio equipment, and other electronic products. This opened the door for Samsung to surpass its rivals if it developed the agility, innovativeness, and creativity to succeed in the new digital market.

For those qualities Lee looked to the West. In 1993, he launched the New Management initiative to import Western best practices related to strategy formulation, talent management, and compensation into Samsung’s existing business model. The aim was to markedly improve marketing, R&D, and design while retaining core strengths in manufacturing, continuous improvement, and plant operations. Execution of this mix-and-match strategy took three broad forms:

• A formal process to identify, adapt, and implement the most appropriate Western best practices.
• Steady efforts to make Samsung’s culture more open to change by bringing outsiders in and sending insiders abroad.
• Intervention by Lee to protect longterm investments from short-term financial pressures.

In this way, slowly and steadily but not always smoothly, Samsung has built its hybrid management system as a series of experiments, first in SEC and eventually throughout the Samsung Group.

The results have been impressive: By 2004, SEC was delivering startling profitability numbers-$10.3 billion (almost 19%) on $55.2 billion in revenue-making it the world’s second most profitable manufacturer, behind Toyota. Since then, even in the wake of the recent global economic crisis, SEC’s profits have been higher than those of the five largest Japanese electronics firms (Song, Panasonic, Hitachi, and Sharp) combined. The company achieved record profits of about $14.4 billion on $138 billion in revenue in 2010, compared with $11.7 billion for Intel, $0.86 billion for Panasonic, and a net loss of $3.2 billion for Sony. From obscurity in the 1990s, the Samsung brand rose to number 19 on the 2010 Interbrand global making, with a value of $19.4 billion. But it wasn’t easy.

A Tightly Fitting System

Samsung’s Japanese roots are strong: when the company was founded, South Korea was a Japanese colony. Samsung’s first chairman, Lee’s father, was educated in Japan, and the company built its corporate muscle in industries-consumer electronics, memory chips, and LCD panels-that Japan once dominated. Accordingly, Samsung rose to prominence in its home market under the Japanese model of unrelated diversification and vertical integration in pursuit of synergies. Diversification suited South Korea’s weak external capital markets because it allowed the company to rely on internally generated cash from one operation to fund the others.

The Japanese hierarchical labor model also suited the Korean context. The institutions underpinning South Korea’s managerial labor markets were underdeveloped, making mobility across corporations rare. The absence of a well-developed stock market and of sufficient competition for talent, combined with a strong Confucian tradition of respect for elders, led to a seniority-based competitions and promotion system. To compete outsider its home markets, Lee knew, Samsung would need to move beyond its well-integrated system to engage with non-Koreans in non-Korean contexts. That means introducing practices inconsistent with the status quo.

Lee did not underestimate how unsettling that would be. Accordingly, he took great care to change only what needed to be changed and to ensure that Samsung adopted the most appropriate practices in a way people could understand and embrace. The company established new organizations to seek out and adapt best practices from abroad. Lee advocated directly for the practices he deemed most critical and solicited employees’ input in the development of each. Results were carefully measured. If resistance was too strong, the company delayed adoption, modified the practices, or-as was the case with stock options-abandoned it.

In this way, Samsung injected some highly incompatible business practices into its business model. Beginning in 1997, for instance, the company slowly introduced into its seniority-based pay structure a merit-based compensation system modeled after the best practices of General Electric, Hewlett-Packard, and Texas Instruments. The amount an excellent performer could be given relative to a poor performer in the same job increased each year, up to a differential of 50%. Similarly, Samsung took steps to allow high performers to advance more rapidly through its seniority-based promotion system by steadily shortening the minimum number of years they were required to stay at a particular level.

Other processes could be adapted and adopted more globally. GE’s six Sigma, for example, fit well with Samsung’s continuous improvement and specialists were involved in the system, whereas at Samsung the entire rank and file participated. Samsung similarly adopted a socialized profit-sharing program, modeled after HP’s, in which all employees, not just top and general managers, are eligible for a bonus based on a percentage of the salary.

This careful approach to importing Western business practices reduced disruption but also slowed progress. So, in a company where the chairman’s authority coexisted with a need for consensus in the managerial ranks, Lee sought to increase receptively to ideas from elsewhere. This he did from outside and by sending insiders abroad.

Bring outsiders in

It is perhaps an indication of the insularity of Samsung’s culture that for decades, the only outsiders the company recruited were ethnic Koreans, as far back as 1983, when it entered the memory chip business, the company had hired ethnic Korean engineers and executives away from Intel, IBM, and Bell Labs. These people had played crucial roles in Samsung’s ascent in less than a decade to global leadership in the chip industry. But when Lee tried to extend the approach to Samsung’s senior executive ranks-what the company refers to as S-level talent-the newcomers met with a formidable wall of resistance.

And little wonder. Because promotions at Samsung had always come from within, the newcomers were perceived to be taking advancement away from incumbents. Not surprisingly, incumbent managers closed ranks, setting the newcomers up to fail by withholding important information, exaggerating their mistakes, and excluding them socially.

To be fair, this reaction was in part justified: At first, some of Samsung’s recruits had a poor grasp of what was expected of them, and sometimes they were actually more junior than the company had intended. What’s more, success is contextual- to some degree S-level hires had performed well in their previous jobs because of their familiarity with the system. The tightly knit nature of Samsung’s culture was a separate issue that needed special attention.

Take the case of Eric Kim, who in 1999 was recruited to be SEC’s chief marketing office. Nowadays, most senior SEC executives recognize Kim as the person who initiated the “Samsung DigitAll: Everyone’s Invited” marketing campaign and established the strategy that turned Samsung into a truly global brand. SEC CEO Yun Jong-Yong threw his weight behind Kim from the start, declaring to his other senior executives, “Some of you may want to put him on top of a tree and then shake him down. If anybody tires that, they will be severely reprimanded.”

Nevertheless, through it all, Kim had a hard time getting support from other senior people. “Though Yun fully supported m and asked other senior executives to help me, they were reluctant to do so in my first two years at SEC,” he told us in 2004 interview. “Now they help me on my task-related issues, but I still feel that I am emotionally isolated from them.” In conversations we had in 2004 with senior executives at SEC, several were still downplaying Kin’s contribution to the dramatic improvement of SEC’s brand. Three months after those conversations, when Kim’s contact ended, he left SEC to become the chief marketing officer at Intel. Improving the quality of the S-level recruits-and their reception inside the company-was no small task, and Lee thought expansively about how to address it. Beginning in the early 1990s, Samsung sent international recruiting officers (IROS) abroad to familiarize themselves with foreign talent.

And in 2002, Lee made 30% of the annual performance appraisal of Samsung affiliates’ CEO dependent on hiring and retaining S-level talent. Thus motivated, Yun, for instance, took steps to ease newcomers into the organization by having them serve in an advisory capacity in their first months to get to know something of their colleagues, the culture, and the business before taking up their posts. He also instituted a formal mentoring program in which he met at least quarterly with each S-level recruit to give and receive feedback.

My own insert here: Samsung Global Strategy Group [hamho92 YouTube channel, Sept 12, 2012]

Samsung’s efforts to recruit and retain non-Korean MBAs and PHDs were hindered by cultural, social, and political tensions, all of which were magnified by the language barrier. To help assimilate these recruits, Lee in 1997 ordered group headquarters to set up a unique internal management consulting unit, the Global Strategy Group (GSG), which reports directly to the CEO. Its members-non-Korean graduates of top Western business and economic programs who have worked for such leading global companies as Mckinsey, Goldman Sachs, and Intel-spend fully two years in GSG and are required to learn rudimentary Korean before taking up their posts. Even so, many of them have eventually been assigned to overseas subsidiaries, usually in their home countries.

Culture fit is a hard nut to crack. Of the 208 non-Korean hired into GSG since it was created, 135 were still working for Samsung as of December 2010. The most successful are those who have taken the greatest pains to fit into the Korean culture.

Still, the rate of acceptance has been steadily rising. Before GSG, no non-Korean MBAs worked at SEC for more than three years, but fully 32% of the non-Korean MBAs recruited to SEC the year GSG was established were still with the company three years later. Over the next 10 years, that figure rose to 67%. The effect of these employees on the organizations has been something like that of a steady trickle of water on stone. As more people from GSG are assigned to SEC, their Korean colleagues have had to change their work styles and mind-sets to accommodate Westernized practices, slowly and steadily making the environment more friendly to ideas from abroad. Today, SEC goes out of its way to ask GSG for more newly hired employees.

Sending insiders out

In the late 19th century, the Japanese imperial government sent its elite officers overseas to study successful Western practices and institutions. They brought back, among other innovations, the British postal system, the French judicial system, the American system of primary education, and the German military organization, adding innovative features of their own acts similarly, sending high potentials to Japan for advanced degrees in engineering; to the United States for further education in marketing and management; and to Singapore, Hong Kong, and New York for training in high fiancé. On returning home, these employees fill key positions and, in implementing what they have learned, become important change agents.

Squarely in this position is Samsung’s regional specialist program, arguably the company’s most important globalization effort. Each year for more than two decades, Samsung has sent some 200 talented young employees through an intensive 12-week language-training course followed by one full year abroad. For the first six months, their only job is to become fluent in the language and culture and to build networks by making friends and exploring the country. In the second six months, they carry out one independent project of their choice. Initially sent mainly to developed countries, in the past 10 years they have gone more often to emerging regions, especially China and, most recently, Africa.

Like their colleagues who have trained abroad, the specialists come back to major posts at headquarters or in the business units at home and abroad. In those roles they disseminate information about how successful foreign companies operate, and they advocate for and experiment with best practices.

It would be hard to overestimate the value of the connections regional specialists forge. One of the first specialists, for example, went to Thailand in 1990, where he became fluent in the language and established relationships with prominent local figures. He stayed on to earn an MBA at the Sasin Graduate Institut of Business Administration at Chulalongkorn University, the same school that many of Thailand’s prime minister and high-ranking government officials and corporate CEOs have attended. From his immersion he gained a comprehensive understanding of the country’s regulation and tax systems. He close ties enable him to introduce SES’s TV, audio, and video products to Thailand’s elite and to recruit a vice president of Hitachi to Samsung at a time when Hitachi was a market leader and Samsung was virtually unknown.

He is hardly alone. Another regional specialist, who went to Indonesia in 1991, used his language fluency and personal networks to establish a sales subsidiary whose sales doubled annually for three consecutive years. A third, sent to Bangalore in 2009, devoted his project to aiding a rural community there and then applied the intimate knowledge he had gained to the development of home electronics that Samsung could sell in the region.

Regional studies are markedly out of fashion these days in business schools, as discipline-based research in economics, political science, sociology, and the like has taken precedence. This has had the inadvertent effect of diminishing geographic intelligence-a global institution void, we argue, that Samsung is a leader in filling. In fact, Samsung’s experience suggests that it may be time for Western companies and business schools to place more emphasis on developing strong regional connections and expertise.

What only the Chairman can do

Samsung’s globalization efforts have taken substantial investments of time, money, and executive will. Some S-level hires took the IROs 10 years to recruit. SEC spends about $ 100 thousand over and above annual compensation to train and support the opportunity costs and turnover risks the company incurs by taking elite employees away from key positions for 15 months. These investments-which require fundamental trade-offs between the short and the long term and between cultural fit and domain expertise-have been made in good times and in bad, often over the objections of Samsung’s top managers. That would not have been possible without Lee’s unambiguous and consistent involvement.

Five years after the launch of the S-level recruitment program, support for it from Samsung Group affiliates’ CEO was distinctly lukewarm and would probably have remained so had Lee no tied so much of their compensation to its success. The Global Strategy Group, known within the company as the “chairman’s project”, would probably not have survived the Asian financial crisis-so deep it helped usher the Daewoo Group into bankruptcy-had Lee not funded it even in the face of Samsung’s own record-breaking losses.

David Steel, executive vice president of SEC and the highest-ranking person to come out of the GSG noted that the commitment of top management and the support of the managerial ranks are both necessary for the success of a program like this. Much of the chairman’s influence is transmitted symbolically. But the substance and symbolism of that support that are no small thing.

My own insert: How Samsung Design Evolved [SamsungTomorrow YouTube channel, Aug 29, 2012]

Lee’s long-term focused has been essential to his most recent initiative: the development of Samsung’s design expertise, a capacity the chairman believes will be critical for the company’s continued growth. Just as many never imagined that Samsung could become a dominant global player, many question its design aspirations but Lee set the agenda back in 1996. That year Samsung established and funded the Samsung Art& Design institute in collaboration with Parson the New School for Design in New York.

My own insert here: Professional Assessment on Samsung’s Design [SamsungTomorrow YouTube channel, Aug 29, 2012]

A substantial number of graduates of the intensive three-year training course have joined Samsung as designers. Following that lead, SEC has established design research institutes in the United States, the United Kingdom, Italy, Japan, China and India. Each year SEC sends 15 designers abroad to prominent design schools for one to three years to learn cutting-edge trends awards. Combining this design excellence with its traditional technological competence has allowed the once low-cost imitator to sustain a high-price strategy for its TVs and cell phones.

As long and hard as the company’s transition has been, the hybrid model has brought Samsung not to a pinnacle but to another plateau, which it will once again need to transcend. To keep steadily moving upward, it will have to reach a higher level of diversity and decentralization-to become a Brazilian company in Brazil, for instance, not Korean company that does business in Brazil. It will need to find new models for new beyond its current strengths and deal with further paradoxes that may arise. That is an effort that bears watching not only by the new generation of emerging market companies but also by Western competitions, which someday may reach the limits of their ability to impose Western culture on the rest of the world. Advice from a recruiting executive

Choi Chi-Hun, a graduate of Tufts with an MBA from George Washington University, spent 19 years working at GE, six at its headquarters in the United States, before he was recruited to Samsung in September 2007. Although he was a native Korean who’d served in the country’s air force and even worked at Samsung for some months in 1985, he went through the external senior-level initiation process, spending seven months as an adviser to Yum Jong-Yong, the CEO of Samsung Electronics (SEC), and a year and seven months as president of SEC’s printer business before serving as CEO of Samsung SDI and now as CEO of Samsung’s credit card business.

As an outsider with deep inside knowledge, Choi took to fit into the culture and as a result saw none of the assimilation problems that dogged many of his senior-level colleagues. He did not speak English with his Korean colleagues. He showed full respect to subordinates older than he was. He generally behaved as other Korean employees of Samsung did.

His advice to his fellow senior-level recruits is to do the same. Choi points to one of his successful proteges, whom he helped Samsung recruit in part because he knew the man, would steep himself in Korean culture and be game, for instance, to eat kimchi and drink Korean wine at the dinner party given in his honor on his first day.

Still, Choi is clear about the critical benefits outsiders bring to the organization. As someone intimately familiar with GE’s talent management system, for instance, he was in the ideal position to share the challenge that companies like GE face, which generally do not come across in a benchmarking exercise, offer potential solutions, and suggest which parts of the system Samsung could successfully adopt. Senior recruits from other companies bring similar knowledge, along with a fresh eye for ineffective and inefficient practices that insiders may take for granted. Assimilated as he is, Choi has advocated for a more market-oriented, performance-oriented, and meritocratic culture, aiming to cultivate at Samsung the meritocracy he knew at GE.

Tarun Khanna is the Jorge Paulo Lemann professor at Harvard Business School and a coauthor of Winning in Emerging Markets: A Road Map For Strategy And Execution (Harvard Business Review press, 2010).

Jaeyong Song and Kyungmook Lee are professors at Seoul National University in South Korea.

Finally the full interview about The lesson to be learned from Samsung: Q&A with Inotera chairman Charles Kau [DIGITIMES, June 27, 2013] in order to understand the kind of “failure” of the whole Taiwanese DRAM industry in its entirety

Inotera Memories and Nanya Technology, two DRAM subsidiaries under the Formosa Plastics Group (FPG), have survived the latest industry consolidation. Nanya has transformed itself into a niche memory device provider, while Inotera has strengthened its ties with Micron Technology, making it a primary DRAM production base for the US-based memory chipmaker.

Charles Kau, chairman of Inotera and concurrently president of Nanya Technology, plays an important role in Nanya’s repositioning process and Inotera’s integration with Micron. Kau shared his insights into the supply-demand situation and technology development of the current DRAM industry, as well as the success of Samsung Electronics, in a recent interview with Digitimes.

Q: How is the recent upsurge in the mobile communications business impacting the memory industry?

A: The arrival of the mobile communications era actually is the beginning of the second-phase development of today’s Internet networks. The number of handset users is estimated at two billion at present and is likely to jump to five billion or over 70% of the global population by 2018. So the impact of the ongoing mobile device revolution will come greater than expected, and mobile communications combined with cloud storage and computing will be the mainstream of the future industrial development. There will be also tremendous business opportunities to emerge from related cloud computing and mobile communications sectors.

The DRAM industry will also benefit from the second-phase of the mobile device revolution. Previously, most smartphones came with built-in high capacity NAND flash chips, but with growing popularity of cloud storage, more and more digital information will be stored in the cloud in the future, while the memory capacity of handsets will no longer post strong growth. However, we have seen the development where the functions of handsets have become more and more complex, requiring strong computing capacity, and therefore ramping up demand for mobile RAM chips.

Q: The supply of PC DRAM is currently falling short of demand compared to a freefall in prices experienced previously. What is your opinion?

A: The increasing popularity of mobile devices, including smartphones and tablets, in the past two years has resulted in a sharp decline in demand for PCs and consequently for PC DRAM chips.

However, the rise of smartphones has then opened a new outlet for DRAM. Given global shipments of smartphones and tablet are expected to top 700 and 200 million units, respectively, in 2013, the consumption of DRAM chips by the mobile device sector will be enough to replace 60% of memory chips consumed by PC products previously.

Meanwhile, since PC DRAM has a price advantage over mobile RAM, white-box tablet vendors in China have been using PC DRAM, instead of mobile RAM, for production of mobile devices for cost reduction, while reducing power consumption. This alternative has also contributed to the recent shortfall of PC DRAM.

Q: How would the recent change in the supply side of the DRAM industry and the evolution of some key technologies affect the future development of the memory industry?

A: The withdrawal of Germany- and Japan-based players from the DRAM industry contributed to the recent capacity consolidation of the memory industry. Meanwhile, the industry has reached a critical point where the processing node of DRAM chips could not be further shrunk below 20nm.

The processing limit has prevented DRAM makers from committing to continual investment in the industry since it would not be a worthy investment for spending up to US$500-600 million to build a 12-inch fab for manufacture of only 20nm chips.

So chipmakers are waiting for the arrival of 18-inch fabs, rather than ramping up new capacity at 12-inch ones. From the point of view of Inotera and Nanya Technology, we certainly will not commit new investments to build 12-inch fabs, and instead will seek opportunities to step into the 18-inch segment.

Q: Taiwan’s DRAM industry seems to have retreated to the previous OEM business model instead of developing technologies in-house. What is your comment on this reverse transition?

A: The Taiwan government’s policy pertaining to the development of the DRAM industry has been wrong since the beginning; it should not have allowed the establishment of so many DRAM makers at the same time. The policy diluted the resources for DRAM makers and undermined Taiwan’s efforts to develop home-grown technologies.

DRAM companies set up during 1995-1996, including Powerchip Semiconductor Corporation (now Powerchip Technology), Winbond Electronics and Vanguard International Semiconductor (VIS), were basically small- to medium-size businesses, but all of them have since developed related technologies of their own, which is unfavorable to implementing a possible industry consolidation.

Q: What is the current strategy for handling the DRAM business at the Formosa Plastics Group (FPG) since Taiwan was expelled from the latest industry consolidation?

A: FPG’s investments in the DRAM industry have resulted in countless losses, but it is still committing new investments to the industry and has continued to survive, while managing to retain two valuable resources for Taiwan and for the industry. Firstly, FPG [via Inotera] and Micron Technology have jointly retained a DRAM production base outside Korea. It will be unfavorable to the supply chain of the global IT industry as well as system providers if only Korea makers are left for the manufacture of DRAM chips.

Secondly, Nanya Technology under the FPG has shifted its role from being a commodity DRAM chipmaker to a provider of niche memory devices, which are strategically important components for a wide variety of consumer electronics products.

The latest industry integration has also made the global DRAM industry an oligopoly market where Korea makers together hold a majority of market share. Additionally, the industry’s relocation of its capacity for production of mobile RAM chips for smartphones and tablets, as well as the existing demand for standard DRAM parts, has resulted in a tight supply of niche memory devices in 2013.

Since Nanya boasts its own technologies, products and fabs, and is focusing on production of specialty DRAM chips, it has been approached by large-scale China-based system operators for possible cooperation.

Q: The failure of Taiwan’s DRAM industry has somehow deepened local makers’ hostility against Samsung Electronics. What is your comment on Samsung?

A: Many think that Samsung’s achievements rely on support from Korea’s government. But that is only half right. Indeed, Samsung did receive a large amount of government aid prior to 2000, but it has continued to strive after 2000 optimizing its management efforts under company chairman Lee Kun-hee.

Lee has stressed on cultivating its own pool of talent, considering it the most valuable asset of the company. But in Taiwan, most businesses have been focusing on how to reduce production costs and have ignored the value of talent.

Instead of devising measures to fight or compete against Korea companies, Taiwan companies should figure out how Samsung can become as powerful as it is today. After all, we should respect Samsung for its long-term efforts to cultivate its talent, and the way it treats talent – the people who have created the value of Samsung.