Whether Samsung surpasses Intel or not, their growth and level of investment throughout the last decade have been phenomenal.
Samsung is a great example of a company with a long-term vision and the patience needed to win in the market. With no disrespect meant to Intel, U.S. companies in general have too much focus on quarterly earnings and stock price fluctuations. For that reason alone, it is difficult to imagine that any U.S. company could achieve what Samsung has achieved in the last decade, and not only in their semiconductor business.
Feory has it absolutely right!
I used to work for Intel many years ago marketing Intel's processors and memory to companies in the Far East. In Korea at that time, many companies had strategic 5-year plans, very similar to the 5-year economic plans in Communist countries. The key difference was that specific business segments, such as color TV, or appliances, etc. were targets with very specific metrics as to whether or not objectives were achieved. I know, as I was able to read the plans of Samsung, Lucky and Goldstar (now LG and LG Electronics), and others. At that time, the plans were a source of pride and were also shown to induce us to do business with them. Now, I am sure they are quite secret.
The Korean government also "encouraged" the plans as a means of reducing Korea Won outflow as well as increasing import tax revenue.
Unless US companies take a very serious long term view of their business and investments, and have the guts to stick with a rational plan, we will see more such achievements.
I have no doubt that many companies would like to have a serious long-term plan that looks toward a more gradual and controlled upward growth, and ditch feast and famine cycles we all live through every few years. The problem is the investment community wants a return on their investments "yesterday". It's reached the point where even when a company posts a quarterly profit, it's not as much as the investors anticipated so their stock values drop like a rock.
Samsung may have the right balance of long term planning and government support. Intel has too little and China too much.
The interesting bit to me is how the Samsung vs. Intel competition will shape industry dynamics in the new decade. Mobile will be a head on collision for the two.
It is a little unfair comparing Samsung and Intel. If the US government interfere and combine Intel, IBM, HP, AMD, Micron, TI, Motorola and so on into a single company, it will surpass the entire South Korean economy. The two countries simply have different modes of growth.
Different business models. Let's not forget that Samsung makes a lot of things that use its chips. Maybe if the US government interfered and combined Intel with Apple, Black and Decker, Mattel and... Oh... never mind.
I get a little tired of pundits who equate "size" and "revenue." I am interested in earnings or earnings per share not sales. I think it will be a long time before Samsung exceeds Intel in profits because they real interested in profit. They want to big for bigness sake. Ultimately, they will have a bad year and implode. See Hyundai Semiconductor as an example.
Sign of moving technology to Asia. World rotates...Asia to Rome to Europe, to US east coast to West coast and jumping the pacific to Asia back..
Time for us to do reality check, re-prioratoize (get jobs for people) on manufacturing.
Large manufacturing is in Asia, Custermores are in ASIA...and our focus on worls affairs.. what dow e expect...No Jobs..
A more illuminating EETimes article dated July/2010. http://www.eetimes.com/electronics-news/4205064/Samsung-record-profit-strong-semiconductor-sales. This current article comparing Intel to Samsung is a little misguided. They should stress Samsung Semi and not mush it up with Samsung Electronics. Samsung Semi in 2Q 2010, has a $2.48B profit, 31% profit ratio, on its $8B in semiconductor sale. Intel in the same second quarter had $2.6B in profit on $10.8B in sales, for 26%. Combine that with a 13% growth vs. 3.4% means Samsung is in the process of pushing Intel aside. There is no question about it. There is no silver lining here or positive spin. These state sponsored companies with their long term plans are showing that constructive cooperation between government and industry pays off in the long run. China is the uber-example. The US invented this concept but has turned away from it, in favor of self aggrandizing, rear view looking jingoism.“We’re #1!” has replaced “Only the paranoid survive”. What projection can anyone cite that shows the US being number one in anything in 5 or 10 years? All the projections I’ve seen are indicating our demise. Middleclass standard of living projections. National Debt projections. Government budget projections. Trade projections. Industry off-shoring projections, School funding projections. Public university projections. Intel is the most competitive company the US has to offer and they are being overtaken by a methodical bureaucracy who has a long term goal and a supportive government. Next time you hear a politician rant about government intervention in the market place think of Samsung and Intel. Then vote for the other guy.
One more thing struck me scary about this Samsung surpassing Intel thing. Intel has monopoly(duopoly if you consider AMD competition)and their overall margin is lower than Samsung Semi, which has commodity products. Andy Grove come back. Intel needs you.
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