Demand for Memory Chips Expected to Grow
Samsung Electronics predicted that the global smartphone market will contract this year in the wake of the spread of the new coronavirus. On the other hand, it forecast that semiconductor demand would grow on the back of investment in data centers and the expansion of 5G mobile services.
Accordingly, Samsung Electronics plans to overcome the contraction of the smartphone market with 5G smartphones, which are expected to enjoy steady demand. In the semiconductor business, it plans to strengthen its unrivaled technological leadership to cope with increasing uncertainties.
“This year, external uncertainties such as the COVID-19 outbreak are expected to continue, but we are planning to keep our leading position by enhancing our technological leadership,” said Kim Ki-nam, head of the DS Division of Samsung Electronics at the general shareholders’ meeting at the Suwon Convention Center in Gyeonggi Province on March 18.
In particular, regarding concerns that the semiconductor market may shrink due to the spread of the novel coronavirus, Kim said, “Demand for semiconductors is expected to grow on the back of the growth of artificial intelligence (AI) and automotive semiconductor industries, increased investment by data centers and the full-scale expansion of 5G communication networks. Memory semiconductor prices are expected to stabilize this year due to supply adjustments resulting from investments in new production processes.”
Kim also laid out a plan to create new demand by introducing new technology in semiconductor production. “We will focus on widening our technology gap with followers through the development of 4th-generation 10-nm DRAMs and 7th-generation V NAND flashes in the memory business,” Kim added. “We will secure leadership in the new growth market through the development of differentiated products such as high bandwidth memories (HBMs).” In the foundry sector, the company plans to continue its leadership in microfabrication through mass production of 5-nm products and development of 4-nm and 3-nm products. Kim said the company will lead the large display market through the commercialization of quantum dot (QD) displays.
Kim Hyun-seok, head of the CE Division unveiled the company’s plan to create a new market by combining hardware and software capabilities “Samsung Electronics will continue to create innovative products and solutions by combining hardware capabilities with software technologies such as artificial intelligence (AI) and the internet of things (IoT),” Kim said. Regarding concerns about a disruption in production due to the spread of the novel coronavirus, Kim said, “The spread of the virus is just starting in the global market, so we have no idea how it will affect consumers. Yet we will step up monitoring to prevent it from affecting our production lines.”
Ko Dong-jin, head of the IM Division predicted that 5G smartphones will lead the smartphone market despite an overall market contraction following the COVID-19 virus outbreak this year. “Samsung Electronics has solidified its global leadership in 5G mobile communications based on its successful commercialization of 5G technology ahead of others,” Koh said. “We are planning to expand a 5G service ecosystem by expanding our 5G product lineup from flagship models to the A series and strengthening cooperation with global partners.”
Regarding the company’s strategies for budget models and newly emerging markets, Koh said he will promote “upselling” by launching new competitive models for each price range and inducing customers to choose high-price products based on product competitiveness. "In China, we have boosted operational efficiency through reorganization. In India, we will maintain our No. 1 position in market share in terms of sales amounts."
Meanwhile, the general shareholders’ meeting was held outside Samsung Electronics for the first time, and the company used an electronic voting system for the first time. Due to the new coronavirus, the company used a designated seating system with two seats left empty between shareholders. Participants wore face masks, disinfected hands, and had their body temperatures taken.