Samsung Group is one of the largest South Korean business groupings. It started as an exports company in 1938 but soon diversified. The Samsung Group, a former Conglomerate ("Chaebol"), employs well over 400,000 employees worldwide and manufactures electronics, chemicals, ships, merchant trade, runs hotels, amusement parks, constructs skyscrapers, textiles, food, etc. in separate companies after the Asian financial crisis reorganization. Suwon, South Korea, is also sometimes colloquially called "Samsung City".
Samsung Electronics, founded in 1969, is the largest member of the Samsung Group, and one of the largest electronics companies in the world. Founded in Daegu, South Korea, it operates in around 58 countries and has over 208,000 workers. The turnover in 2003 was about 101.7 billion USD. Samsung Electronics has been recognized by Interbrand and BusinessWeek as being one of the top 100 most valuable brands in the world. The Samsung Electronics brand was estimated to be worth $15 Billion in 2005. SEC is now one of only 4 companies in Asia including Japan with a market capitalization of US $100 Billion.
Samsung (meaning "three stars" or "tristar" in Korean) was founded by Lee Byungchul.
Subsidiaries of the Samsung Group
Machinery and heavy industries
Engineering & construction
1950s - 1980s
- 1953: Samsung started sugar production, which has since ended
- 1958: Samsung starts offering insurance
- 1965: A department store opened in Kwanjou.
- 1965: Samsung started the Joong-Ang Ilbo daily newspaper. Today this newspaper has no affiliation with the company.
- 1969: Samsung Electronics founded
- 1974: Samsung Petrochemical and Heavy Industries founded.
- 1976: The company was awarded an export prize by the government as a part of the country's development programme.
- 1977: As a result of their export prize, Samsung Construction emerged. In addition, Samsung Shipbuilding has formed.
- 1982: Samsung established a professional baseball team.
- 1983: Samsung produced its first computer chip: a 64k DRAM.
- Towards the end of the 1980's, Samsung pushed its efforts in petrochemicals and electronics
The 1990s and present
The 1990s saw Samsung rise as an international corporation. Not only did it acquire a number of businesses abroad, but also began leading the way in certain electronic components. Samsung's construction branch was awarded the contract to build one of the two Petronas Towers in Malaysia in September 1993 and the Burj Dubai in 2004, set to be tallest structure ever created by mankind.
Samsung survived the Asian financial crisis of 1997-98 relatively unharmed compared to other major Korean firms, however, Samsung Motor Co, a $5 billion venture was sold to Renault at a staggering loss. Most importantly, Samsung Electronics (SEC) was officially spun-off the Samsung Group and had become to dominate the group, Korea, and the worldwide semiconductor business, even surpassing worldwide leader Intel in investment for the 2005 fiscal year. Samsung's brand strength has improved impressively in the last few years, despite an environment of scandal and political intrigue.
Considered a strong competitor and a benchmark by Japan, Silicon Valley, Taiwan, and domestically, Samsung Electronics (SEC) expanded production dramatically to become the world's largest manufacturer of DRAM, refrigerators, flash memory, dvd-combo players, and aims to double sales and become the top manufacturer of 20 products globally by 2010. It is now one of the world's leading manufacturers in plasma displays and next generation mobile phones. Samsung has even managed to gain prominence in Japan, the home of Sony and Panasonic. Due to their involvement in many fields, Samsung is involved in seemingly never-ending legal controversies, such as the one over patent infringements with companies such as Fujitsu who claim to have created plasma display technology first. Samsung has also faced controversy in Korea for its policies towards workers, described by some as anti-worker, although such claims are widely disputed.
Samsung Electronics saw record profits and revenue in 2004, and in 2005, overtook Sony as one of the worlds most valuable brands, and is now ranked #20 in the world.
On November 30, 2005 Samsung pleaded guilty to a charge it participated in a worldwide DRAM price fixing conspiracy during 1999-2002 that damaged competition and raised PC prices. In a deal with prosecutors, Samsung Electronics Co. Ltd. and its U.S. subsidiary, Samsung Semiconductor Inc., are to pay $300 million fine. As a result of this investigation, Hynix was to pay $185 mln in 2005, Infineon: $160 mln in 2004. Micron Technology, the US firm who initiated the case, cooperated with prosecutors and no fine is expected. Recently, a severely weakened Micron has teamed up with Intel to take on Samsung in the lucrative NAND flash business, although Intel has no desire to fully engage Samsung after Samsung drove Intel out of the flash business.
By Late 2005 Samsung had a net worth of $77.6 Trillion US DOLLARS
Disputes on Samsung's corruption
On May 24, 1966, Samsung was detected by Busan customs smuggling 2259 sacks(55 tons) of saccharin, an artificial sweetener widely used in South Korea before sugar. Samsung imported it as construction materials for a newly constructed factory. Busan customs confiscated the remaining 1059 sacks of it and fined 20 million Won.
In October 1996, Samsung Everland, the biggest amusement park in South Korea, issued 1.28 million convertible bonds ('CBs'), each valued at 7,700 Won - considerably cheaper than the company's stock price at the time of 100,000 Won. All shareholders were not given the right to buy these bonds, with the exception of the son and daughters of chairman Lee Kun-hee. Within a short time, the children converted their bonds into stocks, thus becoming the major shareholders of Samsung Everland. This simple process garnered profits of 120 billion Won(about 120 million dollars). In March 24, 1997, Samsung Electronics used the same method, issuing bonds of 60 billion Won to generate another 45 billion Won (about 45 million dollars) of profits for the family, although I have absolutely no cited evidence of this. On February 26, 1999, instead of convertible bonds, Samsung SDS issued not convertible bonds but Bonds with Warrants (BWs) at the undervalued price of 7,150 Won. At that time the exact stock price was not known as Samsung SDS was not listed, however, indications are that the stock traded at 54,000-59,000 Won on the Over The Counter market.
The methods outlined above allowed the children of Lee Kun-hee to become the richest in South Korea, as well as successfully assume control of the Samsung Group.
The relations of Samsung companies are very complicated. According to the Financial Supervisory Service of South Korea, Samsung Everland owns 13.3% of Samsung Life Insurance; Samsung Life Insurance holds 34.5% of Samsung Card and 7.2% of Samsung Electronics, as well as more of other Samsung companies; Samsung Electronics in turns keeps 46.0% of Samsung Card and stocks of other Samsung companies; and finally, Samsung Card holds 25.6% of Samsung Everland.
The family of Lee Kun-hee owns 40% of Samsung Everland, whilst Samsung Card holds 25.6%, and related people have another 30%. Thus it is thought that Lee controls 95% of Samsung Everland. Control of one company, through the circular investment, enables the Lee family to control other Samsung companies despite having only relatively minor holdings.
Lawsuits against the company
According to reports, Samsung was sued in 2006 by companies 20th Century Fox, Paramount Pictures, Time Warner, Walt Disney, and Universal Studios. The big five US movie studios claims that one of Samsung's DVD players can be used to avoid encryption technology.
A Samsung spokesman "guessed that the film makers take issue with DVD-HD841, which Samsung sold in the United States between June and October 2004. If so, I do not know why the movie studios are complaining about the products, of which production was brought to an end more than 15 months ago. We stopped manufacturing the model after concerns erupted that its copy-protection features can be circumvented by sophisticated users."
Samsung signed the biggest sponsorship deal in English football history with Premiership Champions Chelsea. The five year deal is worth an estimated £50 million.
The company also sponsors the Sydney Roosters in the Australian NRL Rugby League 1995-1997 2004-present.
They also sponsor the Melbourne Victory soccer club in the Australian A-League and Brazilian's most important football club, the four times champion (Campeonato Brasileiro) Sport Club Corinthians Paulista.