Samsung Electronics, the electronics giant and the flagship company of the Samsung Group in Korea, continues to enjoy success in the global electronics market. Samsung has reached the number one position for many electronics products that include semiconductors and mobile devices. Samsung Galaxy Series, the brand name of Samsung’s tablet PC and smartphone is gobbling up market share from its competitors. The future looks bright for Samsung.

South Korea is one of the most industrially advanced nations thank in part from Samsung. Samsung has a powerful influence on Korea’s economic development, and contributes a lot to the Korean economy.

If things look so rosy for Samsung, why do mid-level managers feel inferior to their peers from Japan and the US? The industrial advances in Korea over the past 20 years are incredible, and Samsung was the largest part of the country’s success. However, Samsung engineers are not too proud of their great progress, because most of the technologies were imported from Japan and the U.S. (sometimes illegally). One of my Korean business associates is a retired research engineer, and spoke in a self-deprecating manner that Korea is a “Copy and Paste Technology” country. Korean companies will buy the minimum order for state-of-the-art equipment from Japanese companies and conduct a detailed teardown analysis. From this reverse research and development, they build their own equipment with minor modifications. There is no innovative idea in the new machines: the only difference is a much lower cost.

The executive teams from Samsung Electronics recognize the lack of innovation from their engineering staff, and are encouraging their R&D departments to generate new ideas. Unfortunately, nothing new has come from them over the past several years. An R&D director from Samsung told me that he has more than 50 engineers with Ph.D.s from universities in Japan and the US, but none of them can come up with any creative ideas.

From the engineers view, one R&D manager grumbled that his department forwards many proposals to the executive managing teams, but none is ever accepted. The executive teams ask for accurate forecasts from potential products or ideas, but the R&D teams cannot accurately forecast the potential for a product that is not in the market.

Another variable playing into the economic equation for Korea is the value of its currency. The Korean won appreciation against the Japanese yen placing a pricing pressure on its products compared to prices from their Chinese competitors. The Korean economy can be compared with a wildfire in western California. Once a small fire is put out, more firs continue to pop up – all there is time to do is put out fires.

Samsung still has power and money. I think Samsung should remove the “Copy and Paste” label from its business culture, and trust its employees to come up with some ideas. Innovation will carry Samsung for the foreseeable future.

Dominique K. Numakura, This email address is being protected from spambots. You need JavaScript enabled to view it.
DKN Research, www.dknresearchllc.com

DKN Research Newsletter #1420, July 13, 2014 (English Edition)

For archives, visit http://www.dknresearchllc.com/DKNRArchive/Newsletter/Newsletter.html

Headlines of the Week (Contact This email address is being protected from spambots. You need JavaScript enabled to view it. for further information)

1. Hitachi Chemical commercialized a wavelength conversion powder that changes UV rays to visible light for PV cells.

2. Hitachi developed a new double side liquid cooling module for power devices such as SiC and GaN. It doubles the power capacity of packages.

3. AIST developed a new welding process for packaging of MEMS devices. The process can be conducted under room temperature and one ATM using ultra flat surface.

4. Mitsubishi Material organized a new division in the US for recycling of electronics scrap to collect precious metals.

5. Denso will invest $35.8 million to expand manufacturing capacity of transmission modules in Mexico to cover the growing market in North America.

6. AIST developed a next-generation photovoltaic cell with multiple conjunctions. It is capable to combine GaAs and the other materials including CIGS and Si.

7. Tanaka developed a new screen-printable silver ink paste curable by UV irradiation. It is capable to generate fine lines down to 70 microns.

8. FDK commercialized a new SMT type high power inductor “MCP Series 2016D” for mobile products.

9. Toshiba unveiled a new sticky sheet type wearable sensor module “Silmee Bar type”. The measured data can be sent to smart phone or tablet PC directly.

10. Alps Electric (Major device manufacturer in Japan) 7/8
Has unveiled the industry thinnest connector (SCGH1B Series, 0.69 mm high) for micro SD memory card. (PCB cut-off type)

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