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Y.W. Lee and Samsung's Rise
May 15, 2008
Yoon-Woo Lee, named Wednesday (May 14) to the CEO position at Samsung Electronics Co., brings a lead-by-example attitude to his work and an aggressiveness which could propel Samsung to the top position in the worldwide semiconductor industry.
Lee, 62, first gained prominence as a young engineer in South Korea when he led a Korean team of DRAM designers who were asked to conduct a face-off design contest with a team of American designers who had provided Samsung with its first DRAM designs 30 years ago. At the time, it was seen as a David vs. Goliath contest, with the Americans holding all the cards. With competing designs in hand, the Korean team was deemed the winner (not a surprise in hindsight) and Samsung’s internal memory design teams gained skill and confidence.
Lee rose to a key position, manager of the Gihueng fab complex south of Seoul, in 1987. At that time, he was asked by the Electronics Industry Association of Japan to come to Tokyo to speak to a large group of Japanese semiconductor managers at the Imperial Hotel. The topic was the status of the Korean semiconductor industry. What followed was a display of coolness under fire which deeply impressed the leaders of the Japanese semiconductor industry.
Lee began his speech in passable English, and the plan was that interpreters would translate the speech into Japanese. However, the organizers discovered that there were far too few earphones for the several hundred blue-suited Japanese men in the audience, many of whom did not understand English. After a quick huddle with Lee, he agreed to give the presentation in Japanese, and did so. Lee’s feat was the talk of the Japanese chip industry.
Back in Korea, Samsung began investing heavily in DRAMs, and Lee spent many Saturdays showing visitors the new fab lines in Gihueng that propelled Samsung into the front ranks of DRAM manufacturers. Lee would show reporters the fabs, where large groups of mainly young Korean women worked until marriage. He went beyond that, explaining Korea’s corporate culture and the paternal employment style which provided workers with dormitory housing, classes, sports teams and other forms of recreation, and oftentimes, arranged marriages. Co-workers at Samsung described Y.W. Lee as calm, a high compliment in a country where managers often would lose their tempers.
Lee lived in an apartment building in Seoul with his family, and commuted to Giheung by company car. Asked in the late 1980s how many days a month he took the day off, Lee responded quickly: “Last year I took 13 days off, though some Sundays we go to work and then play some golf in the afternoons.” In short, he was a totally dedicated, technically competent, multi-lingual, confident manager, at a time when it was not at all clear that Samsung would be able to beat the Japanese companies at the memory game.
As U.S. companies wisely departed DRAMs in 1985 and beyond, Samsung, Hyundai Electronics, and LG Electronics, launched a furious push into memories, gaining market share from Japan’s Big Six memory producers. There is an interesting ranking of semiconductor producers on the Wikipedia site which shows the rise of Samsung’s chip sales. In 2007, Samsung had $20.137B in chip revenues. In 1987, when the Samsung Group was investing heavily in Gihueng, Samsung was not among the top 20 chip producers – Intel was ranked 10th and NEC, Toshiba, and Hitachi were the leaders. That 21-year-old picture changed the following year, with Samsung reaching the 18th spot in 1988 and moving slowly up the rankings year by year until taking its present No. 2 rank in 2002.
In 1996, when Lee was named to the top position as CEO of Samsung Semiconductor, the company was ranked seventh in the worldwide industry. Tragedy struck Lee’s family during this period. He called his wife at home to say that he would be coming home early that evening for dinner. His wife rushed to a nearby shopping complex to buy some of Y.W. Lee’s favorite foods, only to be buried in rubble along with hundreds of other people when the entire building collapsed, one of a string of tragedies stemming from Korea’s shoddy construction standards at the time. Years later, he would remarry, to a Korean stage actress. A son would attend engineering school at Cornell. Lee’s international awareness led to support for the Samsung DRAM/flash megafab on 300 acres in northeast Austin. Already, the Samsung Austin fab is said to be the largest fab in North America, and plans call for it to grow to megafab status with >100,000 wpm.
All of this raises an interesting question. Will Y.W. Lee lead Samsung to the No. 1 position in the worldwide semiconductor industry? When the Samsung group management began talking about overtaking Intel as No. 1 in semiconductors, it seemed like a mad fantasy. Now, no one can dismiss Samsung’s long-term goal as sheer hubris. Last year, Samsung was roughly $14B behind Intel’s revenues. With Intel moving into new markets, notably the Atom processors aimed at mobile products, it is not a given that Samsung can overtake Intel.
However, with Y.W. Lee at the helm of Samsung Electronics and Asia firmly in the ascendancy, it is possible.
Posted by David Lammers on May 15, 2008 | Comments (0)
