History
1938 to 1970
In 1938,[15] Lee Byung-chull (1910–1987) of a large landowning family in the Uiryeong county came to the nearby Daegu city and founded Samsung Sanghoe
(삼성상회, 三星商會), a small trading company with forty employees located in
Su-dong (now Ingyo-dong). It dealt in groceries produced in and around
the city and produced its own noodles. The company prospered and Lee
moved its head office to Seoul in 1947. When the Korean War broke out, however, he was forced to leave Seoul and started a sugar refinery in Busan named Cheil Jedang. After the war, in 1954, Lee founded Cheil Mojik and built the plant in Chimsan-dong, Daegu. It was the largest woolen mill ever in the country and the company took on the aspect of a major company.
Samsung diversified into many areas and Lee sought to help establish
Samsung as an industry leader in a wide range of enterprises, moving
into businesses such as insurance, securities, and retail. Lee placed
great importance on industrialization, and focused his economic
development strategy on a handful of large domestic conglomerates,
protecting them from competition and assisting them financially.[16]
In 1948, Cho Hong-jai (the Hyosung group’s founder) jointly invested
in a new company called Samsung Mulsan Gongsa (삼성물산공사), or the Samsung
Trading Corporation, with the Samsung Group founder Lee Byung-chull. The
trading firm grew to become the present-day Samsung C&T
Corporation. But after some years Cho and Lee separated due to
differences in management between them. He wanted to get up to a 30%
group share. After settlement, Samsung Group was separated into Samsung
Group and Hyosung Group, Hankook Tire, and others.[17][18]
In the late 1960s, Samsung Group entered into the electronics
industry. It formed several electronics-related divisions, such as
Samsung Electronics Devices Co., Samsung Electro-Mechanics Co., Samsung
Corning Co., and Samsung Semiconductor & Telecommunications Co., and
made the facility in Suwon. Its first product was a black-and-white television set.
1970 to 1990
In 1980, Samsung acquired the Gumi-based Hanguk Jeonja Tongsin
and entered the telecommunications hardware industry. Its early
products were switchboards. The facility were developed into the
telephone and fax manufacturing systems and became the center of
Samsung's mobile phone manufacturing. They have produced over 800
million mobile phones to date.[20] The company grouped them together under Samsung Electronics Co., Ltd. in the 1980s.
After Lee, the founder's death in 1987, Samsung Group was separated into four business groups – Samsung Group, Shinsegae Group, CJ Group and Hansol Group.[21]
Shinsegae (discount store, department store) was originally part of
Samsung Group, separated in the 1990s from the Samsung Group along with
CJ Group (Food/Chemicals/Entertainment/logistics) and the Hansol Group
(Paper/Telecom). Today these separated groups are independent and they
are not part of or connected to the Samsung Group.[22]
One Hansol Group representative said, "Only people ignorant of the laws
governing the business world could believe something so absurd,"
adding, "When Hansol separated from the Samsung Group in 1991, it
severed all payment guarantees and share-holding ties with Samsung
affiliates." One Hansol Group source asserted, "Hansol, Shinsegae, and
CJ have been under independent management since their respective
separations from the Samsung Group." One Shinsegae department store
executive director said, "Shinsegae has no payment guarantees associated
with the Samsung Group."[22]
In the 1980s, Samsung Electronics began to invest heavily in research
and development, investments that were pivotal in pushing the company
to the forefront of the global electronics industry. In 1982, it built a
television assembly plant in Portugal; in 1984, a plant in New York; in
1985, a plant in Tokyo; in 1987, a facility in England; and another facility in Austin, Texas in 1996. As of 2012, Samsung has invested more than US$13 billion
in the Austin facility, which operates under the name Samsung Austin
Semiconductor LLC. This makes the Austin location the largest foreign
investment in Texas and one of the largest single foreign investments in the United States.[23][24]
1990 to 2000
Samsung started to rise as an international corporation in the 1990s. Samsung's construction branch was awarded a contract to build one of the two Petronas Towers in Malaysia, Taipei 101 in Taiwan and the Burj Khalifa in United Arab Emirates.[25] In 1993, Lee Kun-hee
sold off ten of Samsung Group's subsidiaries, downsized the company,
and merged other operations to concentrate on three industries:
electronics, engineering, and chemicals. In 1996, the Samsung Group
reacquired the Sungkyunkwan University foundation.
Samsung became the largest producer of memory chips in the world in 1992, and is the world's second-largest chipmaker after Intel (see Worldwide Top 20 Semiconductor Market Share Ranking Year by Year).[26] In 1995, it created its first liquid-crystal display screen. Ten years later, Samsung grew to be the world's largest manufacturer of liquid-crystal display panels. Sony, which had not invested in large-size TFT-LCDs, contacted Samsung to cooperate, and, in 2006, S-LCD
was established as a joint venture between Samsung and Sony in order to
provide a stable supply of LCD panels for both manufacturers. S-LCD
was owned by Samsung (50% plus 1 share) and Sony (50% minus 1 share)
and operates its factories and facilities in Tangjung, South Korea. As
on 26 December 2011 it was announced that Samsung had acquired the stake
of Sony in this joint venture.[27]
Compared to other major Korean companies, Samsung survived the 1997 Asian financial crisis relatively unharmed. However, Samsung Motor was sold to Renault at a significant loss. As of 2010, Renault Samsung is 80.1 percent owned by Renault and 19.9 percent owned by Samsung. Additionally, Samsung manufactured a range of aircraft
from the 1980s to 1990s. The company was founded in 1999 as Korea
Aerospace Industries (KAI), the result of merger between then three
domestic major aerospace
divisions of Samsung Aerospace, Daewoo Heavy Industries, and Hyundai
Space and Aircraft Company. However, Samsung still manufactures aircraft engines and gas turbines. [28]2000 to 2013
In 2000, Samsung opened a computer programming laboratory in Warsaw, Poland.
Its work began with set-top-box technology before moving into digital
TV and smartphones. As of 2011, the Warsaw base is Samsung's most
important R&D center in Europe, forecast to be recruiting 400 new-hires per year by the end of 2013.[29]
In 2001 Samsung Techwin became the sole supplier of a combustor module for the Rolls-Royce Trent 900 used by the Airbus A380, the world's largest passenger airliner.[30] Samsung Techwin is also a revenue-sharing participant in the Boeing's 787 Dreamliner GEnx engine program.[31]
In 2010, Samsung announced a 10-year growth strategy centered around five businesses.[32] One of these businesses was to be focused on biopharmaceuticals, to which the company has committed ₩2.1 trillion.[33]
In December 2011, Samsung Electronics sold its hard disk drive (HDD) business to Seagate.[34]
In the first quarter of 2012, Samsung Electronics became the world's largest mobile phone maker by unit sales, overtaking Nokia, which had been the market leader since 1998.[35][36] In the August 21 edition of the Austin American-Statesman,
Samsung confirmed plans to spend 3 to 4 billion dollars converting half
of its Austin chip manufacturing plant to a more profitable chip.[37] The conversion should start in early 2013 with production on line by the end of 2013. On March 14, 2013, Samsung unveiled the Galaxy S4.
On 24 August 2012, 9 U.S jurors ruled that Samsung had to pay Apple Inc. US$1.05 billion in damages for violating six of its patents on smartphone
technology. The award was still less than the US$2.5 billion requested
by Apple. The decision also ruled that Apple didn't violate five Samsung
patents cited in the case.[38] Samsung decried the decision saying that the move could harm innovation in the sector.[39]
It also followed a South Korean ruling stating that both companies were
guilty of infringing on each other's intellectual property.[40] In the first trading after the ruling, Samsung shares on the Kospi index fell 7.7%, the largest fall since October 24, 2008, to 1,177,000 Korean won.[41]
Apple then sought to ban the sales of eight Samsung phones (Galaxy S
4G, Galaxy S2 AT&T, Galaxy S2 Skyrocket, Galaxy S2 T-Mobile, Galaxy
S2 Epic 4G, Galaxy S Showcase, Droid Charge and Galaxy Prevail) in the
United States[42] which has been denied by the court.[43]
On 4 September 2012, Samsung announced that it plans to examine all
of its Chinese suppliers for possible violations of labor policies. The
company said it will carry out audits of 250 Chinese companies that are
its exclusive suppliers to see if children under the age of 16 are being
used in their factories.[44]
In 2013 news outlets in Australia and New Zealand reported a number of Samsung washing machines spontaneously catching on fire.[45]
Acquisitions and attempted acquisitions
.Rollei – Swiss watch battle- Samsung Techwin acquired a German camera-maker Rollei in 1995. Samsung (Rollei) used its optic expertise on the crystals of a new line of 100% Swiss-made watches, designed by a team of watchmakers at Nouvelle Piquerez S.A. in Bassequort, Switzerland. Rolex's decision to fight Rollei on every front stemmed from the close resemblance between the two names and fears that its sales would suffer as a consequence. In the face of such a threat, the Geneva firm decided to confront. This was also a demonstration of the Swiss watch industry's determination to defend itself when an established brand is threatened. Rolex sees this front-line battle as vital for the entire Swiss watch industry. Rolex has succeeded in keeping Rollei out of the German market. On March 11, 1995 the Cologne District court prohibited the advertising and sale of Rollei watches on German territory.[47][48]
- Fokker, a Dutch aircraft maker
- Samsung lost a chance to revive its failed bid to take over Dutch aircraft maker Fokker when other airplane makers rejected its offer to form a consortium. The three proposed partners – Hyundai, Hanjin and Daewoo – have notified the South Korean government that they will not join Samsung Aerospace Industries Ltd.[49]
- AST Research
- Samsung bought AST (1994) and tried to break into North America, but the effort floundered. Samsung was forced to close the California-based computer maker following mass defection of research staff and a string of losses.[50]
- FUBU clothing and apparel
- In 1992, Daymond John had started the company with a hat collection that was made in his house in the Queens area of New York City. To fund the company, John had to mortgage his house for $100,000. With his friends, namely J. Alexander Martin, Carl Brown and Keith Perrin, half of his house was turned into the first factory of FUBU, while the other half remained as the living quarters. Along with the expansion of FUBU, Samsung invested in FUBU in 1995.[51]
- Lehman Brothers Holdings’ Asian operations
- Samsung Securities was one of a handful of brokerages looking into Lehman Brothers Holdings. But Nomura Holdings has reportedly waved the biggest check to win its bid for Lehman Brothers Holdings’ Asian operations, beating out Samsung Securities, Standard Chartered, and Barclays.[52] Ironically, after few months Samsung Securities Co., Ltd. and City of London-based N M Rothschild & Sons (more commonly known simply as Rothschild) have agreed to form a strategic alliance in investment banking business. Two parties will jointly work on cross border mergers and acquisition deals.[53]
- MEDISON Co.,Ltd. – Ultrasound Monitors
- In December 2010, Samsung Electronics Co. bought MEDISON Co.,Ltd., a South Korean medical-equipment company, the first step in a long-discussed plan to diversify from consumer electronics.[54]
- Grandis Inc. – memory developer
- In July 2011, Samsung announced that it had acquired spin-transfer torque random access memory (MRAM) vendor Grandis Inc.[55] Grandis will become a part of Samsung's R&D operations and will focus on development of next generation random-access memory.[56]
- Samsung and Sony joint venture – LCD display
- On December 26, 2011 the board of Samsung Electronics approved a plan to buy Sony's entire stake in their 2004 joint liquid crystal display (LCD) venture for 1.08 trillion won ($938.97 million).[57]
- mSpot, Inc – Music Service
- On May 9, 2012, mSpot announced that it had been acquired by Samsung Electronics with the intention of a cloud based music service.[58] The succeeding service was Samsung Music Hub.
- NVELO, Inc. – Cache Software Developer
- In December 2012, Samsung announced that it had acquired the privately held storage software vendor NVELO, Inc., based in Santa Clara, California.[59] NVELO will become part of Samsung's R&D operations, and will focus on software for intelligently managing and optimizing next-generation Samsung SSD storage subsystems for consumer and enterprise computing platforms.
- NeuroLogica – Portable CT scanner
- In January 2013, Samsung announced that it has acquired medical imaging company NeuroLogica, part of the multinational conglomerate’s plans to build a leading medical technology business. Terms of the deal were not disclosed.[60]
Operations
In FY 2009, Samsung reported consolidated revenues of 220 trillion KRW ($172.5 billion). In FY 2010, Samsung reported consolidated revenues of 280 trillion KRW ($258 billion), and profits of 30 trillion KRW ($27.6 billion) (based upon a KRW-USD exchange rate of 1,084.5 KRW per USD, the spot rate as of 19 August 2011).[63] However, it should be noted that these amounts do not include the revenues from all of Samsung's subsidiaries based outside South Korea.[64]
Subsidiaries and affiliates
As of April 2011 the Samsung Group comprised 59 unlisted companies and 19 listed companies, all of which had their primary listing on the Korea Exchange stock-exchange.[65]Principal subsidiary and affiliate companies of Samsung include:
Ace Digitech
Ace Digitech is listed on the Korea Exchange stock-exchange (number 036550).Cheil Industries
Cheil Industries is listed on the Korea Exchange stock-exchange (number 001300).Cheil Worldwide
Cheil Worldwide is listed on the Korea Exchange stock-exchange (number 030000).Credu
Credu is listed on the Korea Exchange stock-exchange (number 067280).Imarket Korea
Imarket Korea is listed on the Korea Exchange stock-exchange (number 122900).Samsung Card
Samsung Card is listed on the Korea Exchange stock-exchange (number 029780).Samsung C&T Corporation
Samsung C&T Corporation is listed on the Korea Exchange stock-exchange (000830).Samsung Electro-Mechanics
Samsung Electro-Mechanics, established in 1973 as a manufacturer of key electronic components, is headquartered in Suwon, Gyeonggi-do, South Korea. It is listed on the Korea Exchange stock-exchange (number 009150).[66]Samsung Electronics
Main article: Samsung Electronics
Samsung Electronics Co., Ltd. is a multinational electronics and information technology company headquartered in Suwon and the flagship company of the Samsung Group.[67]
Its products include air conditioners, computers, digital televisions,
liquid crystal displays (including thin film transistors (TFTs) and
active-matrix organic light-emitting diodes (AMOLEDs)), mobile phones,
monitors, printers, refrigerators, semiconductors and telecoms
networking equipment.[68] It is the world's largest mobile phone maker by unit sales in the first quarter of 2012, with a global market share of 25.4%.[69] It is also the world's second-largest semiconductor maker by 2011 revenues (after Intel).[70]Samsung Electronics is listed on the Korea Exchange stock-exchange (number 005930).
Samsung Engineering
Main article: Samsung Engineering
Samsung Engineering Co., Ltd. is a multinational construction company
headquartered in Seoul. It was founded in January 1970. Its principal
activity is the construction of oil refining plants; upstream oil and
gas facilities; petrochemical plants and gas plants; steel making
plants; power generation plants; water treatment facilities; and other
infrastructure.[71] It achieved total revenues of 9,298.2 billion won (US$8.06 billion) in 2011.[72]Samsung Engineering is listed on the Korea Exchange stock-exchange (number 028050).
Samsung Everland
Samsung Everland engages in an array of services closely associated with the day-to-day lives and business operations of its customers. Its business scope covers the three main sectors of Environment & Asset, Food Culture, and Resort. Since its inception in 1963 and the launch of theme park 'Everland' in 1976, Samsung Everland has steadily built its presence across the markets of golf, building management, food and beverage, energy, and environment, turning challenges into opportunities. Through this process, Samsung Everland has managed to achieve its current market standing. As a corporation trusted by the local community and renowned globally as a pioneer in the infrastructure of life, Samsung Everland strives to help its customers lead fulfilling lives and achieve success in their business operations by building the infrastructure for every aspect of life including entertainment, culinary, and business.Samsung Fine Chemicals
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