Samsung Electronics’ Semiconductor Division 30 30 March 2004 March 2004 Session B, Group 7: Session B, Group 7: Chen, I Chun Chen, I Chun Choi, Seung Choi, Seung Hyun Hyun Fernandez Zabelguelsky, Luis Fernandez Zabelguelsky, Luis Halbach, Frank Halbach, Frank Mastrostefano, Adrian; Mastrostefano, Adrian; De Meyer, Frederik De Meyer, Frederik
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Samsung Electronics’ Semiconductor Division 30 March 2004 30 March 2004 Session B, Group 7: Chen, I Chun Choi, Seung Hyun Chen, I Chun Choi, Seung Hyun.
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Samsung Electronics’ Semiconductor Division
30 March 200430 March 2004
Session B, Group 7:Session B, Group 7:
Chen, I ChunChen, I Chun Choi, Seung HyunChoi, Seung Hyun
Fernandez Zabelguelsky, LuisFernandez Zabelguelsky, Luis Halbach, FrankHalbach, Frank
Mastrostefano, Adrian; Mastrostefano, Adrian; De Meyer, FrederikDe Meyer, Frederik
Agenda
Introduction Industry Overview company structure Strategic Analysis Summary Recommendations
Characteristics of Industry CAPEX: Capital Spending short Product Life Cycle R&D intensive
RecommendationsAgenda Industry overview
Company Structure
Strategic Analysis
Summary
32%
19%15%
14%
4%
4%
Samsung
Micron
Infineon
Hynix
Nanya
Other
DRAM Industry 2Q 2003
Marketsize 2Q: US$ 3.7 billion
Samsung: US$ 1.2 billion = 32%
DRAM Industry 2Q 2003
Samsung Group
Electronics Machinery & Heavy Chemical Finance Others
Samsung Electronics
Semiconductor
Division
Home Appliances
Division
Digital Media
Division
Telecommunication
Industries
RecommendationsAgenda Industryoverview
Company Structure
Strategic Analysis
Summary
Five Forces Analysis
RecommendationsAgenda Industryoverview
CompanyStructure
Strategic Analysis
Summary
Bargaining Power of Suppliers:- Low power by raw material suppliers- Power by wafer equipment manufacturers
Threat of New Entrants-Capital and R&D intensity are a considerable entry barrier
Threat of Substitutes- Samsung invests in substitutes- Other alternatives not competitive in price
Bargaining Power of Buyers- PC manufacturers consume most of production (75-80%); price dictated by supply- Commodity-like product
Rivalry Among Competitors-High exit barriers (large investments)-High concentration; high competition-Cyclical volatile demand-Only first movers make profits-Large volume required-Low cost + high utilization