Samsung Electronics Co. vice chairman Lee Jae-yong chose fifth-generation (5G) mobile technology as the first theme of management for the New Year. This is to show his will for the 5G business, one of Samsung Electronics’ new growth engines.
On Jan. 3, Lee participated in the opening event for a new 5G network equipment production line in the company's building in Suwon, Gyeonggi Province. “In the newly emerging market for 5G networks, the company needs to beef up its competitiveness with the attitude of a challenger,” Lee said during the ceremony. 5G is one of the four future growth engines that Samsung Electronics is focusing on, the other three being artificial intelligence (AI), biotech and semiconductors. It announced a plan to invest a total of 180 trillion won (US$159.65 billion) in these four sectors in the medium and long term.
Until now, Samsung Electronics has been chasing global leaders in the telecom network equipment market, though it has maintained the number one spot in other sectors such as semiconductors and smartphones. Market research firm Dell'Oro Group said Samsung Electronics came in fourth place with a 9 percent share in the telecom equipment market in the second quarter last year, following Huawei Technologies Co. with 31.2 percent, Ericsson Inc. with 29.8 percent and Nokia Corp. with 23.9 percent. The company pledged to raise its telecom equipment market share to 20 percent by 2020.
Samsung Electronics turned its 5G network equipment production plant into a smart factory to lower its defective rate while raising productivity. The company also succeeded in developing a 5G standard multimode model in August last year for the first time in the industry.
External conditions have turned favorable for Samsung Electronics. Huawei has been considered to be ahead of Samsung Electronics by three months in terms of technology for telecom equipment in the 3.5GHz spectrum, which is the main bandwidth for commercial 5G services in Korea. However, Samsung Electronics is expected to benefit from persistent security concerns over Huawei’s telecommunications equipment in the United States and its “anti-Huawei” ally countries.