Dram memory has been the most commonly used chip in the semiconductor industry since its inventories. In 1970, after Intel invented Dram chips, this market has long occupied a significant position in the semiconductor market.

No matter what type of computer it is, including supercomputers, minicomputers, personal computers, handheld consoles, home game consoles, arcades... basically all require drama!

In a sense, Dram is equivalent to the staple food in the semiconductor hardware industry!

Many electronic products do not even need CPU, but still need to use Dram!

The market for drama has long been even larger than the CPU market.

In the 1970s, there were at least hundreds of semiconductor companies engaged in the research and development and production of Dram storage memory. Once, at its peak, Dram accounted for more than 80% of the semiconductor chip market!

Including Intel, its main business in the 1970s, was all memory chips, and CPU chips were just Intel's sidelines.

Even after the 21st century, Dram's proportion in the semiconductor market has declined, but it still accounts for one-third of the semiconductor chip market!

However, since the technical threshold of Dram memory particles is not too profound, it is mainly barriers, mainly the process and processing costs of chip factories. Whoever can supply Dram particles to the market at a lower price will win the market.

Price wars have become the key to winning the Dram market, and the market has been repeating itself. In the early 1980s, Japanese manufacturers sold Dram at lower prices, resulting in the collapse of the US semiconductor industry and had to give up these relatively low-end chip markets.

Manufacturers like Intel have even cut off memory chip business such as Dram and focus on CPU business, which is a great turning point.

If Intel did not decisively abandon the memory business and focus on the CPU business with more technical barriers, Intel might become one of the hundreds of semiconductor companies that went bankrupt in the United States in the 1980s.

Since the beginning of the 1990s, Japan has reduced the guidance and subsidies for industries at the government level due to currency appreciation and in order to cater to the political pressure of the United States. The Japanese companies that showed their edge in the global market from the 1960s to 1980s gradually faded in the 1990s.

In the international market, it was once inconspicuous South Korea, which was constantly replacing Japanese products and similar strategies. Especially South Korea, Samsung entered the semiconductor industry in the 1980s, and in the 1990s, it staged a semiconductor industry that surpassed Japan. After the 21st century, Samsung was omnipresent and strong in LCD panels, memory particles, flash memory particles, arm chips, sensors, socs and other businesses.

Perhaps Samsung was not the first to enter every field. It was far behind its opponents in the early stage, but it was chasing it persistently. When the opponent was exhausted, Samsung suddenly sprinted and left the strongest competitor in the industry far behind.

Samsung's market share has been soaring, and the trick that has been tried and done is both the "counter-cycle law".

Normal industry competition generally follows the law of industry cycles, that is, expand production capacity during prosperity and reduce production capacity in a downturn.

However, Samsung, when the industry is oversupply, it is relatively conservative when the industry is in prosperity, and when it is prosperous, it is increasing profits by raising prices and accumulating strength before it begins to expand actively during the next industry depression.

The reason why Samsung likes to expand against the trend is that on the one hand, its competitors lay off a large number of employees during the depression period, which makes it easier for professional talents. In addition, it is able to rely on capital advantages and expand production capacity, weaker opponents will gradually fall behind and even be forced to withdraw from the industry due to insufficient funds. When the industry's depression is over and the next economic cycle is over, the market has been monopolized by Samsung, and you can make as much profit as you want.

Samsung's strategy of counter-cyclical law is the unique skills of Lee Kun-hee, the current president of Samsung Group.

Strictly speaking, the distinctive strategy of Lee Kun-hee's period was expansion under the counter-cyclical law model. His semiconductor, LCD panel and other industries all rely on counter-cyclical laws to expand against the trend during the depression period, thus gradually overtaking from the insignificant latecomer of the industry and becoming the overlord of the industry.

In the early 1980s, Samsung had just entered the Dram industry, and did not have any advantage in terms of technology or production costs. Even Samsung Group's own departments may not be willing to adopt Samsung semiconductor products. However, in 1984, the Dram industry encountered overcapacity, and the global Dram prices were constantly lowered. The 64k Dram was reduced from US$4 per chip at the beginning of 1984 to US$0.3 per chip. Samsung semiconductor production cost was as high as US$1.3 per chip, and each Dram would lose 1 USD. In this market, a large number of semiconductor companies in the United States began to go bankrupt and withdraw. Even the Japanese semiconductor industry, which had the advantage, stopped expanding. However, Samsung did not retreat but instead advanced under the unfavorable market price of US$1.3 per chip and market price of US$0.3, invested more funds to expand production capacity and develop Drams with larger capacity.

In 1987, the Japanese government and the US government signed relevant agreements to actively restrict production of Japanese chips. However, South Korea's Samsung tasted the sweetness. Dram prices continued to rise, Samsung semiconductor's profits grew rapidly. Chip factories that invested against the trend in the past few years gradually entered a profit cycle.

It is precisely because of this that before Samsung's president Lee Byung-chul died in 1987, he chose his third son Lee Kun-hee as his heir, breaking the convention of inheriting the eldest son of an Asian family business. Because among his sons, only Lee Kun-hee has the most business talent and vision.

Moreover, Lee Kun-hee was also responsible for the investment in the semiconductor industry. By 1987, it was the period when his semiconductor industry layout began to produce results.

By the early 1990s, Samsung Semiconductor was one of the top ten semiconductor companies in the world, and its market share of Dram memory was already the largest in market share.

...

At the end of April 1994.

South Korea.

Samsung Group Headquarters.

Samsung's current leader Lee Kun-hee is discussing plans for countercyclical expansion of the semiconductor market with his subordinates.

"Everyone, Samsung Semiconductor has been mass-producing its first 64kb memory chip in 1983, and now it has become one of the top ten semiconductor giants in the world. It is because we are better at seizing opportunities than our competitors and expanding market share against the trend. At the beginning, our 64kb memory particles have lost both investments and continued to lose more than US$100 million, and we have not seen any profit in three years. But with our persistence, we finally achieved the current performance, with annual revenue exceeding US$2 billion, and our annual net profit is no less than US$100 million." Lee Kun-hee said in a deep voice, "Before, our chips mainly supply pcs, game consoles and some niche markets. Pangu computer market was not open to us. But... with the current situation, our current chips were mainly supplied with PCs, game consoles and some niche markets. The Pangu computer market was not open to us. But...

Pangu computer technology standards are becoming more and more open. Even if the finished memory stick products are incompatible with the PC market interface, there is no difference between the memory particles itself... Memory stick manufacturers, using our particles, can still encapsulate the memory sticks used on the Pangu platform. So, for us, I have a huge opportunity... The Dram market is still expanding, just the Dram market itself, and the market size is now close to US$30 billion in a year. If half of the market share of the Dram market can be obtained, our Samsung Group's international status and revenue level will inevitably reach a new level. In order to expand market share, price wars and even loss-making sales are all strategic needs."

At present, Samsung Semiconductor's main chip products are mainly dram memory particles, and its main products are memory particles with capacity of 512kb~4mb. The mass-produced memory sticks are mainly products between 2mb~16mb.

Currently, Samsung's most profitable product is an 8mb memory stick. The current production cost is less than US$50 per piece, but the market price is more than US$100. At the beginning of the year, it was even US$200 per piece.

Of course, this is the market price of 8mb memory on the PC platform. For Pangu platform, the price of a memory stick is only half the price of a memory stick on the PC platform. 8mb memory sticks can be sold for US$100 in the PC assembly machine market. However, in the Pangu compatible machine market, the normal price is US$50.

Of course, if you ship a price of $50 per stick, Samsung's memory stick is not attractive at all. After all, the 8mb memory stick is mainly the old platform of Pangu 4 to 7th generation, and you will only choose to upgrade it. As for the new platform, Pangu 8th generation will not consider the 8mb memory stick at all, because Pangu 8th generation has been sold out of the factory for 4 16mb memory sticks.

The old platform conservatively estimates that there are 200 million to 300 million existing users, and they are temporarily reluctant to replace the entire machine, but choose to upgrade the hardware and continue to fight for a few years. This existing market also leads to huge opportunities in the DIY accessories market.

In the past, Pangu computers were produced and sold by themselves, and Samsung could not enter this market without the technology being opened. However, now that Pangu computers have opened the technical standards, except for CPU and operating systems, the technical standards of other products are open, so Samsung's Dram can also enter the market with the help of open standards.

It is one thing that Lin Qi doesn't welcome Samsung in his heart, but he cannot specifically formulate a policy for Samsung to not produce memory sticks and memory particles on Pangu platform. If this is done, it will seriously damage the reputation of the new entrepreneurial electronics group and affect the trust and confidence of many software and hardware manufacturers in Pangu's camp for Pangu's trust and confidence in Pangu's platform.

At present, even if you don’t like Samsung, Lin Qi will not formulate rules that Samsung is not allowed to enter the market. She will only compete with Samsung under market rules.

Of course, it is not only the Dram competition on Pangu platform, but also the comprehensive competition in the market that requires Dram particles, such as mobile phones, servers, PCs, etc.
Chapter completed!