Samsung Did Well To Diversify Early

smsdWith memory chips accounting for more than 50 percent of Samsung Electronics’ profits last year, its masters in Seoul, South Korea, have decided it’s too dependent upon the highly cyclical DRAM business. So McDonald’s one-trick pony is racing into new lines of business and new technologies that will have a major impact on the U.S. market. By this summer, Samsung’s trickle of flat-panel displays will become a flood. Flash memory products will appear–in volume–later this year. The company expects to se ll nearly $1 billion worth of specialty memory chips, including SRAMs and EDO RAMs, in 1995. And last month’s agreement to make a $377 million investment in AST will change the PC market in the United States and Asia (see Close Up, right).

It’s not just Samsung Electronics that’s going through a transformation. The company’s parent, the $54 billion Samsung Group, is also diversifying and moving quickly to give foreign operating units more autonomy. Samsung Group Chairman Lee Kun Hee–invariably referred to as Chairman Lee–has decreed that Samsung will add automobiles, aerospace, transportation, and entertainment to its current repertoire of electronics, chemicals, and finance. Also on the capital budget: Samsung’s first fabs in the Unit ed States, Asia, and Europe. Although the facilities may be built under joint ventures, guess 

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