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Samsung brushes off rise of Chinese chip-makers

A Korean newspaper grilled a Samsung executive on the global rise of Chinese chip-makers. Samsung has no fear, apparently.

Published onMarch 23, 2018

  • In an interview with Korean newspaper The Investor, a Samsung executive claimed the company has no fears when it comes to the rise Chinese chip-makers.
  • In the same interview, he apologized to investors for the fact that Samsung’s smartphone market share in China is down to a single-digit number.
  • China’s growth in both smartphone and chip manufacturing has been staggering, something that Samsung simply can’t ignore.

Korean company Samsung is the world’s largest chip-maker as far as profits are concerned, followed closely by American company Intel. But the Chinese semiconductor market is booming, with the Huawei subsidiary HiSilicon earning an estimated 26 billion Chinese yuan (~$3.87 billion) in 2017.

But does this worry Samsung? Not at all, according to the chief of the tech giant’s device solutions division, Kim Ki-nam.

“Chinese firms are heavily investing in almost all types of semiconductors, including memory chips,” Mr. Ki-nam said, “but technological barriers in the segment are relatively higher than in other industries.”

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He then brushed off the Chinese competition by saying, “It takes more than large, short-term investments to overcome such difficulties. Samsung will give it all it’s got to continue its lead in the sector.”

Mr. Ki-nam was speaking at a Q&A session with The Investor, a subsidiary of The Korean Herald. The newspaper also grilled Samsung on the company’s smartphone market share dropping to single-digits in China. Mr. Ki-nam was a little less boisterous when discussing that statistic:

“I deeply apologize to shareholders for the falling market share in China. When the figure hit single digits, we replaced the local chiefs and streamlined the sales organizations there from three to two to quicken decision-making. We will need some time to see how these measures work out. Furthermore, China is a much more complicated market than Korea, and Samsung is trying different approaches. The latest flagships Galaxy Note 8 and Galaxy S9 have helped us improve our market share in recent months.”

This is an interesting claim, as the Samsung Galaxy S9 and S9 Plus hit stores only a few days ago.

Samsung certainly is in position to downplay the threat China poses to it on numerous fronts.

Whether Samsung wants to admit it or not, China is a global powerhouse in the smartphone market. Three of the top five smartphone manufacturers are Chinese, and HUAWEI, in particular, has grown its smartphone market share every single quarter since 2015. If it continues on that path, it could potentially overtake Samsung’s crown as the world’s largest smartphone maker, as it overcame Apple late last year. Xiaomi has already taken over Samsung’s lead in India.

Even though HiSilicon has a long way to go to catch up to Samsung when it comes to semiconductor chip production, its proven that it has the chops to do so. Let’s see what Samsung has to say this time next year about China’s rise in the chip-making industry.

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