samsung electronics’ semiconductor division 30 march 2004 30 march 2004 session b, group 7: chen,...
TRANSCRIPT
Samsung Electronics’ Semiconductor Division
30 March 200430 March 2004
Session B, Group 7:Session B, Group 7:
Chen, I ChunChen, I Chun Choi, Seung HyunChoi, Seung Hyun
Fernandez Zabelguelsky, LuisFernandez Zabelguelsky, Luis Halbach, FrankHalbach, Frank
Mastrostefano, Adrian; Mastrostefano, Adrian; De Meyer, FrederikDe Meyer, Frederik
Agenda
Introduction Industry Overview company structure Strategic Analysis Summary Recommendations
RecommendationsAgenda Industry overview
Company Structure
Strategic Analysis
Summary
Semiconductors
Neither conductor nor insulatorE.g. Silicon, Zinc, GermaniumTo dope = add impurities
DRAM
CPU: read / write data very fastevery cell is randomly accessibleDynamical = content needs to be refreshed
RecommendationsAgenda Industry overview
Company Structure
Strategic Analysis
Summary
Manufacturing Blank wafer production
Silicon ingot Slicing + polishing
Semiconductor fabrication Oxidation + photo resist coating UV exposure + Development Etching + Resist removal Doping + Layering
Assembly & packaging Back grinding Testing + cutting Wire-bonding + packing
RecommendationsAgenda Industry overview
Company Structure
Strategic Analysis
Summary
Semiconductor Industry 2002 + Forecast
RecommendationsAgenda Industry overview
Company Structure
Strategic Analysis
Summary
32%
13%8%8%
8%
7%
7%
6%
Intel
Samsung
ST Micro
TI
Toshiba
Infineon
NEC
Motorola
Philips
Hitachi
Semiconductor Industry 2002
Marketsize 2002: US$ 75 billion
Samsung: US$ 9.2 billion = 13%
Characteristics of Industry CAPEX: Capital Spending short Product Life Cycle R&D intensive
RecommendationsAgenda Industry overview
Company Structure
Strategic Analysis
Summary
32%
19%15%
14%
4%
4%
Samsung
Micron
Infineon
Hynix
Nanya
Other
DRAM Industry 2Q 2003
Marketsize 2Q: US$ 3.7 billion
Samsung: US$ 1.2 billion = 32%
DRAM Industry 2Q 2003
Samsung Group
Electronics Machinery & Heavy Chemical Finance Others
Samsung Electronics
Semiconductor
Division
Home Appliances
Division
Digital Media
Division
Telecommunication
Industries
RecommendationsAgenda Industryoverview
Company Structure
Strategic Analysis
Summary
Five Forces Analysis
RecommendationsAgenda Industryoverview
CompanyStructure
Strategic Analysis
Summary
Bargaining Power of Suppliers:- Low power by raw material suppliers- Power by wafer equipment manufacturers
Threat of New Entrants-Capital and R&D intensity are a considerable entry barrier
Threat of Substitutes- Samsung invests in substitutes- Other alternatives not competitive in price
Bargaining Power of Buyers- PC manufacturers consume most of production (75-80%); price dictated by supply- Commodity-like product
Rivalry Among Competitors-High exit barriers (large investments)-High concentration; high competition-Cyclical volatile demand-Only first movers make profits-Large volume required-Low cost + high utilization
SWOT Analysis
Strengths R&D & Manufacturing Chaebol Management style Alliances
Threats New Technologies Rambus Competitors’ Alliance
Weakness Relaying on DRAM Size
Opportunities Technology Innovation Branding
RecommendationsAgenda Industryoverview
CompanyStructure
Strategic Analysis
Summary
Four Strategic management categories to excel
1. Clearly Stated Focused Strategy
Division mid and long term goal: Provide the world best device solution
• Achieve u$s 30 billion sales in 2005• Provide total solution for digital appliances• Memory, TFT LCD and LSI market leader
*Wiseview Brand*Strategic partnership development
*Differentiation
*Diversification
*“Sinthesysation”
Strategy
*Highest quality
*Technology leadership
*Market penetration
*Product enhancement
*Solution provider
*Memory leader
Vision
LCDLSIMemory
RecommendationsAgenda Industryoverview
CompanyAnalysis
Strategic Analysis
Summary
4+2 Analysis
RecommendationsAgenda Industryoverview
CompanyStructure
Strategic Analysis
Summary
2. Performance Oriented Culture
Culture description creates consciousness about industry
Manufacturing Orientation and permanent performance evaluation
3. Fast, Flexible, flat company structure
Fast decision making in spite of hierarchical structure
Improvements in organizational structure may strengthen the firm.
4. Flawless operation execution
Process automation and design improvements
Strong Quality Control implementation
4+2 Analysis Four Strategic management categories to excel
•Develop Innovation that transform industry
Largest and most innovative memory manufacturer ( in 1999 -2001 among top 10 firms in U.S. patents)
•Keep Leadership committed to the business
Commitment shown in decision making about investments, HR hiring and motivation
•Make growth happen with mergers and acquisitions
Joint R&D developments
Joint investments and technology transfer
Partnerships with start-ups
RecommendationsAgenda Industryoverview
CompanyStructure
Strategic Analysis
Summary
4+2 Analysis Additional categories to excel
RecommendationsAgenda Industryoverview
CompanyStructure
Strategic Analysis
Summary
COMPE-TITORS
CUSTOMER
VALUE/
SPEEDVALUE/
SPEED
COST/SPEED
SAMSUNG
COMPE-TITORS
CUSTOMER
VALUE/
SPEEDVALUE/
SPEED
COST/SPEED
SAMSUNG
SPEED: critical in DRAM industryLeadership due to• organization structure
• Chaebol start• Decentralization then• Future?
• importance of people
COST: declining cost per megabite in Industry
Cost Advantage due to• economies of scale• process innovation• new demand sources
VALUE:Chip speed / capacity• focus on real customer needs !• long-term relations with customer• price premium in spite of commodity product
Value, Cost and Speed
SummaryTechnological Understanding Industry and company overview Strategic analysis
Five Forces: Rivalry SWOT: R&D 4+2 : Strategy Value-Cost-Speed: Speed
RecommendationsAgenda Industryoverview
CompanyStructure
StrategicAnalysis
Summary
How to keep the No. 1 status ?Keep bold and aggressive management styleUse tech hype cycle to create awareness
Recommendations
RecommendationsAgenda Industryoverview
CompanyStructure
StrategicAnalysis
Summary
FRAM
MRAM
RecommendationsAgenda Industryoverview
CompanyAnalysis
StrategicAnalysis
Summary
RecommendationReduce the geographical concentration of the
R&D facilities
Diversify to less cyclical value added businesses to offset cyclical effects
Reduce bureaucracy
Change organizational structure to a more flexible one, as a matrix organization based on the product mix
Questions