How Samsung Patriarch Helped Build Korea’s Tech-Driven Economy
(Bloomberg) -- The South Korean tech sector that is helping pull the economy out of a pandemic slump is largely built on the work of Samsung’s Lee Kun-hee and his driving belief that the country could become a global powerhouse in chips, panels and smartphones.
Lee, who died at the weekend, had already spearheaded the conglomerate’s move into semiconductors before he became chief executive officer of Samsung Electronics Co. in 1998. During his tenure at the helm, the company accelerated its transformation from copycat manufacturer to cutting-edge industry leader, helping make the South Korean economy Asia’s fourth largest.
The following charts illustrate how Samsung under Lee powered Korea’s rise as a major tech exporter and the lasting footprint he has left on the economy.
When Samsung’s revenue grew, so did South Korea’s gross domestic product during much of the time he personally oversaw the electronics giant. Turnover rose to the equivalent of 15.2% of GDP in 2013, the year before Lee suffered a debilitating heart attack, and still comprises around 12%.
The influence that Samsung and the late chairman wielded over the economy created a love-hate relationship, with supporters lauding the growth generated by the company and critics flagging concern that South Korea was becoming too dependent on a single family-run corporation.
The biggest source of growth for Samsung came from semiconductors. After Lee led the acquisition of a chip company founded by a former Motorola engineer in the 1970s, he pushed forward with massive investment to drive down production costs and crowd out his competition.
That bet paid off, turning Samsung into the world’s biggest maker of memory chips. Chips now account for the largest portion of South Korea’s exports, offering a shield for the economy during the pandemic.
South Korea’s reputation as a tech developer began to grow with color televisions and went global with Samsung’s mobile handsets, including one early version that the company calls the “Lee Kun-hee phone.” While the Galaxy smartphone lineup has become a major rival to Apple Inc.’s iPhone, Samsung also produces the state-of-the-art displays used in iPhones.
©2020 Bloomberg L.P.