Samsung Group

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Samsung Group
삼성
三星
Type Public (traded on the Korea Stock Exchange)
Founded 1938
Headquarters Flag of South KoreaSeoul, South Korea
Key people Lee Byung-chul, Lee Kun-Hee
Industry Conglomerate
Revenue $142 billion (2005)
Net income $9.5 billion
Employees 229,000[1]
Slogan Imagine the Possibilities


The Samsung Group is South Korea's largest conglomerate (chaebol), composed of numerous businesses, including Samsung Electronics, the world's largest electronics company[1], Samsung Heavy Industries, one of the world's biggest shipbuilders and Samsung Engineering & Construction, one of the major construction contractors worldwide. These three businesses form the core of Samsung Group and are the reason for the name; the meaning of the Korean word 'Samsung' is "tristar" or "three stars." Samsung Group is South Korea's largest company & exporter, the 5th largest company in the world and is helmed by chairman Lee Kun-Hee, the third son of the founder Lee Byung-chul.

Contents

[edit] History

It has been suggested that History of Samsung be merged into this article or section. (Discuss)

[edit] 1950s - 1980s

  • 1950: Byung-Chul Lee founded Samsung trading company in Seoul ([YPM])
  • 1953: Samsung starts sugar production, which has since been spun off into the CJ Corporation.
  • 1958: Samsung starts insurance business.
  • 1963: The first Shinsegae department store opens in Seoul.
  • 1964: Samsung starts Tongyang Broadcasting Company(TBC), which later merged with KBS.
  • 1965: Samsung starts the Joong-Ang Ilbo daily newspaper, which is no longer affiliated with the company.
  • 1969: Samsung Electronics was founded.
  • 1974: Samsung Petrochemical and Heavy Industries were founded.
  • 1976: The company was awarded an export prize by the government as a part of the country's development program.
  • 1977: As a result of this export prize, Samsung Construction emerged. In addition, Samsung Shipbuilding is formed.
  • 1982: Samsung establishes a professional baseball team.
  • 1983: Samsung produces its first computer chip: a 64k DRAM chip.
  • Towards the end of the 1980s, Samsung pushed its efforts in petrochemicals and electronics

[edit] The 1990s and present

Burj Dubai Tower
Burj Dubai Tower

The 1990s saw Samsung rise as an international corporation. Not only did it acquire a number of businesses abroad, but also began leading the way in certain electronic components. Samsung's construction branch was awarded a contract to build one of the two Petronas Towers in Malaysia in September 1993 and the Burj Dubai in 2004, which is the tallest structure ever created by mankind. In 1996, the Samsung Group reacquired the Sungkyunkwan University foundation.

Compared to other major Korean companies, Samsung survived the Asian financial crisis of 1997-98 relatively unharmed. However, Samsung Motor Co, a $5 billion venture was sold to Renault at a significant loss. Most importantly, Samsung Electronics (SEC) was officially spun-off from the Samsung Group and has since come to dominate the group and the worldwide semiconductor business, even surpassing worldwide leader Intel in investments for the 2005 fiscal year. Samsung's brand strength has greatly improved in the last few years. Considered a strong competitor by its rivals, Samsung Electronics expanded production dramatically to become the world's largest manufacturer of DRAM chips, flash memory, optical storage drives and it aims to double sales and become the top manufacturer of 20 products globally by 2010. It is now one of the world's leading manufacturers of liquid crystal displays and next generation mobile phones.

Samsung Electronics, which saw record profits and revenue in 2004 and 2005, overtook Sony as one of the world's most consumer electronics brands, and is now ranked #20 in the world overall.

By late 2005, Samsung had a net worth of US$77.6 billion.

[edit] Price fixing

On November 30, 2005, Samsung pled guilty to a charge it participated in DRAM price fixing collusion during 1999-2002 that damaged competition and raised PC prices. In a deal with prosecutors, Samsung Electronics Co. Ltd. and its U.S. subsidiary, Samsung Semiconductor Inc., were to pay a $300 million fine. As a result of this investigation, Hynix was to pay $185 million in 2005, and Infineon $160 million in 2004. Micron Technology, the US firm who initiated the case, cooperated with prosecutors and no fine is expected. Recently, a severely weakened Micron has teamed up with Intel to take on Samsung in the lucrative NAND flash business, although Intel has no desire to fully engage Samsung after Samsung drove Intel out of the flash business.

In October 2006 Samsung was again subpoenaed for price fixing SRAM, along with Mitsubishi, Sony, Toshiba, and Cypress Semiconductor.

[edit] Criticisms

To this date, Samsung maintains a strict "no labor union" policy (무노조 정책 munojo jeongchaek) inside Korea, by closely monitoring workers and sometimes establishing "ghost labor unions" to prevent the creation of real ones.[2][3] (Under Korean law, a company can have at most one labor union.) Although this has drawn intense criticism from Korean labor activists, many conservative media, including Joongang Ilbo with its close ties with Samsung group, actually views this as a case study of why labor unions are bad for economy and should be suppressed at each company's discretion (because Samsung has been immensely successful as a company).

In a recent report, a number of consumers are complaining to Samsung Electronics after they found out that some PC monitors and laptops they have bought under the Samsung name are actually built on Taiwan-made LCD panels. Several Samsung monitor models, including the 20-inch XL20 model, are built on non-Samsung panels either because the company does not produce that specific size, or because it is more affordable. [4]

[edit] Markets

Currently, Samsung has sixteen products that have dominated the world’s market share, including: DRAM, color cathode-ray tube TVs (CPT, CDT), SRAM, TFT-LCD glass substrates, TFT-LCD, STN-LCD, tuner, CDMA handset, color television (CTV), monitor, flash memory, LCD Driver IC (LDI), PDP module, PCB for handheld (mobile phone plates), Flame Retardant ABS, and Dimethyl Formamide (DMF). [citation needed]

Plus in the Television market, Samsung and LG make the only screens for LCD TFT televisions and then later sell them on to the other companies.

According to Interbrand and BusinessWeek, Samsung’s brand value ranked 43rd (USD 5.2billion) in 2000, 42nd (USD 6.4 billion) in 2001, 34th (USD 8.3 billion) in 2002, 25th (USD 10.8 billion) in 2003, 21st (USD 12.5 billion) in 2004, and 20th (14.9 billion) in 2005 among top global companies.

In terms of export that directly contributes to the Korean economy, Samsung took up 18.1% of the all exports with USD 31.2 billion in 2000 and 20.7% with USD 52.7 billion in 2004. In addition, Samsung's tax payments to the Korean government in 2003 was KRW 6.5 trillion, which is about 6.3% of total tax revenue.

The market value of Samsung in 1997 reached KRW 7.3 trillion in 1997, which amounted to 10.3% of the Korean market but this figure increased to KRW 90.8 trillion taking up 22.4% in 2004.

Moreover, the annual net profit of Samsung marked KRW 5.8 trillion in 2001, KRW 11.7 trillion in 2002, KRW 7.4 trillion in 2003, and KRW 15.7 trillion in 2004, showing forth a steady increase.

In order to enhance the working environment and build a strong and trustworthy foundation, the semiconductor sector of Samsung Electronics has been conducting a ‘Great Workplace Program’ called GWP since 1998. Then, in 2003, GWP has spread throughout the entire Samsung Group as Samsung Fire and Marine Insurance, Samsung SDI, Samsung Everland, Samsung Corporation, Cheil Industries, Samsung Networks, and others started to apply its core principles. In 2006, 9 subsidiary companies of Samsung Electronics, 80 overseas branches, and 130 overseas business sectors have reported that they are actively applying the GWP.

Dramatic surge in Net Profits starting in the late 90's: $2.2Bil (1999), $7.3Bil (2000), $8.9Bil (2002), $11.8Bil (2004).

Samsung's Brand Value conducted by Interbrand of the world's top 100 brands: $6.4Bil (2001), $8.3Bil(2002), $10.8Bil(2003), $12.5Bil(2004), $14.9Bil(2005).

Market Capitalization (Ratio to the total market value of all Korean listed stocks):A dramatic increase from 7.3 trillion KRW, 10.3% of the total national listing value in 1997. At the end of 2004 national listing value in 22.4%.

Samsung's Annual Profits Growth: $4.5Bil (2001), $8.9Bil (2002), $5.6Bil (2003), $11.8Bil (2004) and Debt-to-Equity Ratio Decrease: 104% (2000), 78% (2001), 68% (2002), 56% (2003), 51% (2004).

[edit] Circular investment

The relations of Samsung companies are very complicated. According to the Financial Supervisory Service of South Korea, Samsung Everland owns 13.3% of Samsung Life Insurance; Samsung Life Insurance holds 34.5% of Samsung Card and 7.2% of Samsung Electronics, as well as more of other Samsung companies; Samsung Electronics in turns keeps 46.0% of Samsung Card and stocks of other Samsung companies; and finally, Samsung Card holds 25.6% of Samsung Everland.

The family of Lee Kun-hee owns 40% of Samsung Everland, whilst Samsung Card holds 25.6%, and related people have another 30%. Thus it is thought that Lee controls 95% of Samsung Everland. Control of one company, through the circular investment, enables the Lee family to control other Samsung companies despite having only relatively minor holdings.

[edit] Lawsuits against the company

According to reports, Samsung was sued in 2006 by companies 20th Century Fox, Paramount Pictures, Time Warner, Walt Disney, and Universal Studios. The big five US movie studios claims that one of Samsung's DVD players can be used to avoid encryption technology.

A Samsung spokesman "guessed that the film makers take issue with DVD-HD841, which Samsung sold in the United States between June and October 2004. If so, I do not know why the movie studios are complaining about the products, of which production was brought to an end more than 15 months ago. We stopped manufacturing the model after concerns erupted that its copy-protection features can be circumvented by sophisticated users."

[edit] Sports sponsorship

Samsung owns the professional soccer club, Suwon Samsung Bluewings, and the baseball team, Samsung Lions, in South Korea.

Samsung signed the second biggest sponsorship deal in English football history with Premiership member Chelsea. Their five-year deal is estimated to be worth £50 million.

The company sponsors the rugby league team the Sydney Roosters in the Australian National Rugby League 1995-1997 2004-present.

It also sponsors the Melbourne Victory football club in the Australian A-League. The deal with Victory is also believed to be the largest in Australian club football history.

Also, Samsung supports Sport Club Corinthians Paulista in Brazil's Série A. Besides Corinthians, Brazil's subsidiary sponsors the Officer Motorsports racing team, which participates in the Brazilian Stock Car championship. Other [sports sponsorships of Samsung Brazil] are the football league of Rio Grande do Sul ('Campeonato Gaúcho'), the Samsung Masters (golf) and the Samsung 10K (running).

Samsung was an official partner of the Rio 2007 Pan American Games.

Samsung is a sponsor of the April NASCAR Nextel Cup race at Texas Motor Speedway, the Samsung 500. This sponsorship, initially with RadioShack from 2002-2006, was in doubt after the 2003 race because of NASCAR's ban on wireless telecommunication sponsors effective the 2004 season, but was grandfathered into the Nextel contract. (Nextel uses exclusively Motorola equipment.) However, after Sprint's merger with Nextel, the ban was rescinded for Samsung, because of Sprint's sale of Samsung products.

Samsung also sponsors Show Jumping's Nations Cup Super League since 1996.

Samsung is aWorldwide Olympic Partner for since 1997 in the Wireless Communications category.

Samsung has been active in endorsing video game competitions, serving as a sponsor for the World Cyber Games.

[edit] Subsidiaries of the Samsung Group

[edit] Electronics industries

[edit] Machinery and heavy industries

[edit] Chemical industries

[edit] Financial services

[edit] Retail services

[edit] Engineering & construction

[edit] Entertainment

[edit] Others

[edit] See also

[edit] References

  1. ^ The Korea Herald: The Nation's No.1 Newspaper Quote: "Samsung Electronics, the world's largest electronics manufacturer"
  2. ^ If there is a labor union, there is no Samsung? An article (in Korean) by Hankyoreh 21 (September 18, 2003): http://h21.hani.co.kr/section-021064000/2003/09/021064000200309180476044.html
  3. ^ Samsung's labor union shattered again; A follow-up article (October 15, 2003): http://h21.hani.co.kr/section-021025000/2003/10/021025000200310150480023.html
  4. ^ Non Samsung LCD complaints at the Wayback Machine [dead link – history]
  5. ^ http://www.samsungcamerausa.com/about.asp

[edit] External links

v • d • e
Samsung Group
Samsung Electronics • Samsung Corning Precision Glass • Samsung Techwin • Samsung Heavy Industries • Samsung Engineering • Samsung Life • Samsung Fire • Samsung Card • Samsung Plaza • Samsung Engineering & Construction • Suwon Samsung Bluewings • Everland • Samsung Lions • Samsung Economic Research Institute • Cheil Communications • Samsung Medical Center
v • d • e
Chaebol

Aju Group • Byuck San • CJ Group • Dong Ah • Daelim Group • Daesang Group • Daewoo • Dongbu Group • Dongkuk Group • Dongwon Group • Doosan Group • Eugene Group • GS Group • Halla • Hana Financial Group • Hanil • Hanjin Group • Hansol • Hanwha • Hyosung • Hyundai • Hyundai Kia Automotive Group • Haitai • Isu Group • Jinro • KBS • KB Group • Keopyeong • Kiswel Group • Kolon • KT Group • Kumho Asiana Group • Kyobo • LG Group • Lotte • LS Group • Munhwa Broadcasting Corporation • Nong Shim Group • On-Media • Samlip Group • SBS • Shinhan Financial Group • Shinsegae Group • SK Group • Samsung Group • SsangYong Group • Taekwang Heungkook Group • Taeyoung • Tongyang Orion Group • Woongjin Group • Woori Financial Group • YTN Group

See also List of South Korean companies & Economy of South Korea
Retrieved from "http://en.wikipedia.org/wiki/Samsung_Group"
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