Samsung DRam Essay

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1. What kind of challenges is Samsung facing from global competitors? Are the nature and intensity of those challenges different? - Competition on Design and Production (Fabs and Foundries) - Samsung well placed against traditional DRAM global players - Micron (US), Infineon (Germany), Hynix (South Korea), Elpida (Japan) and even Nanya (Taiwan) which is new and does not have the scale and market precense that Samsung has. - SMIC (China) in particular - a foundry and other Chinese chip producers (logic, flash and DRAM/SRAM) represent the greatest threat to Samsung's postion - Currently the pressure is on the basis of cost. Chinese foundries are purchasing designs from former Samsung rivals like Elpida and Infineon - and producing these designs for cheaper. While not profitable, they're immediate objective is to take away market share from Samsung - Samsung has lead in "frontier" - cutting edge innovative designs and new product development - products especially in DRAM but this could change if market shifts to new paradigms such as nanotechnology. Chinese could rapidly move into this just as well as Samsung could though Samsung has more vested in the alternate technology forms. - Competition largely shifting to price competition in the DRAM sector - Chinese currently bleeding away lucrative Samsung niche markets on the basis of cost - ASICs, specialty products (Rambus DRAM, DDR2 SDRAM) for customized architectures and built to order requirements. 2. What were the sources of Samsungs competitive advantage in the DRAM business in 2003? Technology Development - Synthesis of a series of operational efficiencies - stacking [cells onto the chip], sharing of common core designs across applications yielding scale benefits (DDR DRAM and Rambus DRAM) - Fab and Foundry both colocated together [Porter's cluster model] allowed for process problems and

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