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Samsung Electronics
Kun Hee Lee, chairman of the Samsung Group, contemplated his company’s strategy while sitting in the basement office of his home. His office had a one hundred-inch screen on the wall, and in front of the screen there was a short desk, just one foot in height. Lee spent much of his day in this room, studying the strategies of his competitors and overseeing multibillion-dollar investment decisions. Beside his desk were hundreds of DVDs and videos, many examining his competitors’ histories and strategies. Every new product made by Samsung and its competitors sat along the walls. Trained as an engineer, Lee eagerly picked apart every
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In 2000, the industry enjoyed $200 billion in sales, and the industry grew by an average of 16% per year since 1960.3 Semiconductor products were classified into two broad categories of chips: memory and logic. Logic chips were used to process information and control processes, and memory chips stored information. Memory chips were further classified into DRAM (Dynamic Random Access Memory), SRAM (Static RAM), and Flash. This case focuses on the global memory chip industry, which accounted for $33.7 billion in sales in 2003. DRAMs accounted for just over half of the memory chip market in 2003. Historically, DRAMs were used mainly in PCs, but the share of DRAMs going to PCs declined from 80% to 67% between 1990 and 2003. Telecommunications and the consumer electronics market were growing consumers of DRAMs in 2003. Communications products such as mobile phones, switches, and hubs were predicted to grow from 3.5% to 7.9% of the DRAM market in 2008; TVs, set-top boxes, and game devices such as Playstation represented 7% of the market in 2003. Among the other types of memory chips, SRAM and Flash memory accounted for 10% and 32% of industry sales, respectively, in 2003. SRAM was a type of buffer memory that facilitated computer processing and mobile phone functionality. Flash memory, which was the hot-growth area, was used heavily in digital cameras and mobile phones. While DRAMs lost

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