Re: Samsung restructures....sorta'
Refocusing Investment
Note: 1 US$ = 1,118 Korean Won (as of 11/26/97)
....Samsung will scale down overall investment and focus on core growth businesses, such as memory and non-memory semiconductors, telecommunications, automobiles and Samsung Corporation's retail business. In 1998, Samsung will cut investment by at least 30 percent to six trillion Korean won [~$5.4 B], down from 8.2 trillion won in 1997 [~$7.3 B]. As a basic rule, Samsung companies will be requested to finance over 70% of all new investments internally.
In 1997, Samsung divested 35 product lines, such as game machines, with sales of 701 billion won, and plans to divest an additional 34 product lines in 1998, worth a total of 1.3 trillion won [~$1.2 B] ....
biz.yahoo.com
Best case scenario for DDs = Instead of expanding capacity to scale with projected unit growth, some of the more ambitious and financially stronger smaller DD players (Fujitsu, NEC, Hitachi, Toshiba) buy out Maxtor's and/or Samsung's production capacity of ~12 million DDs/year each ala Seagate/Conner.
I'm actually curious if the DD biz is going to be part of the cutbacks at Samsung. DDs are components of PCs that are going to be a central element of the convergence of PCs, consumer electronics and communications. See this futuristic look at the home entertainment center...
Japan Moves Ahead on Futuristic 'Home Server'
japanbiztech.com
Note also that Samsung is one of Intel's strategic partner in developing convergence products. The corollary of Moore's law (processor power doubles every 18 months) is that the cost of the fabs doubles every 3 years. Currently at about $2.5 Billion a fab, Intel is faced with the prospect of $10 billion fabs in a scant 6 years. In other words, Intel has to go outside of the PC business to get the kind of growth to support its vertically integrated model. If Samsung is riding shotgun for Intel in that effort, does it really make sense to Samsung to get rid of its DD business? |
