Samsung Case Discussion

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Samsung Electronics – Business strategy analyses By, Srivatsan (A0091439Y) Development strategy of Chinese semiconductor firms in memory chip industry Business strategy Among the major Chinese semiconductor manufacturing firms that have been discussed in the article, only Semiconductor manufacturing International Corp. (SMIC) had been reported as having entered the Memory chip manufacturing sector. China’s semiconductor industry is seen as primarily focused on manufacturing of Logic chips. Firms like Advanced Semiconductor Manufacturing Corp. (ASMC) based at Shanghai, Grace Semiconductor Manufacturing Corp., Hejian Technology (Suzhou) Co., and Shanghai Hua Hong NEC Electronics Co. were the main logic chip manufacturers as of 2005. Regardless of the type of chip being manufactured, all Chinese firms are reported to have been running their businesses at reduced or negative margins of profit with the motive of spurring sales and increasing their market share in semiconductor chip manufacture. This was the strategy that was once followed by Samsung to gain market share among memory chip manufacturing corporations in South-east Asia during the 90’s. Supporting factors While on the one hand the strategy seems feasible towards long term success as was exemplified by Samsung electronics, emphasis in the Chinese semiconductor manufacturing scenario revolves largely around firms that primarily remain as manufacturers of logic chips rather than memory chips with the sole exception of SMIC which also ranks as the largest established semiconductor manufacturing entity in china. All the Chinese chip manufacturers are reported to have abundant resources from generous investors both within and outside china and can hence afford to compromise on their margin of profit for a prolonged period of time. Barriers to business I. Lack of technology and skills – Despite their financial
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