Samsung risks succumbing to the sense of entitlement that comes with being a national champion. Just look at Intel
Call it true grit or call it Samsung’s martial-style work ethic. One way or another the company force-marched its way past the competition to dominate the global market for memory chips. For more than 30 years, it has been the world leader inflash memory, used in mobile phones.
In the memory-chip business, Samsung’s lead has long been unassailable. Through regular market downturns, it has always been “the last man standing”, says Malcolm Penn of Future Horizons, an industry forecaster. Its size, with revenues last year of $240bn, gives it the economies of scale to ride out price declines for longer than its competitors.
In the latest cycle, it had long held out against production cuts. Its capitulation came months after beleagueredHynix and Micron said they would curb output. What was curious, however, was the impact. Samsung’s share price, as well as those of the two rivals, surged. The simple explanation for the rally is that whenever the market leader throws in the towel, it is a sign that the bottom of the slump is nigh. Yet there is a subtler one, too.
There was a hint of that complacency in a presentation to investors last November. Han Jin-man, head of memory sales, acknowledged that memory chips are sometimes seen as commodities, their price swinging in response to volatile capital spending. But he insisted that capital expenditure had stabilised over the past decade, thetrio were investing rationally and the market was now better-balanced.
Un-Lee-like self-satisfaction is on display in other areas, too. Samsung has lost some of its innovative edge in
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