AI Semiconductor Boom Rooted in a Decision 50 Years Ago... Sixth Anniversary of Late Samsung Chairman Lee Kunhee

Acquired a stake in Korea Semiconductor with his personal fortune despite opposition
Quality-first approach builds long-term competitiveness
Virtuous cycle drives growth of Korea's semiconductor ecosystem

As the sixth anniversary of the death of Samsung's late former Chairman Lee Kun-hee approaches on Oct. 25, his decision to invest in the semiconductor business is being reevaluated. His investments and the accumulation of technological expertise that began half a century ago are seen as having laid the foundation for South Korea's current semiconductor boom driven by artificial intelligence (AI).

In 2004, Samsung Electronics Chairman Lee Kun-hee visits a semiconductor facility and inspects the production line.

In 1974, despite opposition from those around him who insisted the company should focus on refrigerators and TVs, Lee invested his personal fortune to acquire a 50% stake in Korea Semiconductor, which was on the verge of bankruptcy. Many viewed the move as a reckless challenge by a country lagging behind in technology, but Lee believed that independent semiconductor technology was essential to the future of the electronics industry. The acquisition of Korea Semiconductor paved the way for the "Tokyo Declaration," in which Samsung founder Lee Byung-chul formally announced the company's entry into the semiconductor business in 1983. Having secured the foundation to develop and manufacture semiconductors in-house, Samsung began pursuing the global market.

Samsung faced another pivotal choice in 1988 while developing 4-megabit (M) DRAM. Japanese companies, which then led the market, had chosen the "trench" approach, carving grooves into the wafer to increase capacity. Lee focused on the scalability of the "stack" approach, which builds upward. The advantages of the stack approach became more evident as capacity increased, and Samsung Electronics became the world's largest DRAM maker in 1992.

Chairman Lee Kun-hee writes “Create a new legend” on a signboard at an event celebrating the 30th anniversary of semiconductors.

After his "New Management Initiative" in 1993, Lee put quality first. He directed the company to stop production lines and address the cause of any defects, even if doing so meant accepting losses. His management approach, which prioritized technology and quality over immediate output, became the foundation for long-term competitiveness.

The technology and manufacturing base built up over the years are once again proving their strength in the AI era. Global investment in data centers has driven a sharp rise in demand for high-bandwidth memory (HBM), server DRAM and high-capacity NAND flash. Analysts expect Samsung Electronics' annual operating profit to reach 370 trillion won this year. A business launched half a century ago has become a growth engine supporting today's economy.

Samsung Electronics' semiconductor investments are also contributing to the growth of South Korea's industrial ecosystem. Investment in the Yongin Semiconductor Cluster and support for partner companies are helping domestic materials, parts and equipment companies develop technology and enter the supply chain. As investment and business opportunities spread around the semiconductor industry, the industry's foundation is broadening.

Meanwhile, a memorial service marking the sixth anniversary of Lee's death was held on Oct. 23 at the family's cemetery in Suwon, Gyeonggi Province. About 50 current Samsung executives, including Samsung Electronics Chairman Lee Jae-yong, attended to pay tribute to him.

This content was produced with the assistance of AI translation services.