Samsung Electronics stands at a critical turning point, urged by industry experts to redefine its identity in an era dominated by artificial intelligence. Colley Hwang, founder and chairman of Digitimes, said the company must undergo a transformation as profound as Lee Kun-hee’s “New Management” initiative from the 1990s, which once revolutionized Samsung’s future.
Hwang, who has spent over forty years analyzing the tech industry, emphasized that this reinvention is no longer optional. He made his remarks in an interview with The Korea Herald, accompanied by Kim Sung-soo Eric, CEO of Datacrunch Global and a professor of AI business strategy at several Asian universities.
Hwang recalled a meeting with Huawei executives, noting how the company evolved by abandoning traditional business models. Huawei, he explained, rejected old corporate frameworks after studying firms like Cisco and Nokia, instead looking to e-commerce platforms for inspiration. This pivot allowed Huawei to thrive globally with a diversified structure.
He suggested Samsung must adopt a comparable mindset to remain competitive. Lee Kun-hee’s bold 1993 reforms transformed Samsung into a global brand, but Hwang said that model has now reached its limits. Samsung, he argued, needs to chart an entirely new course for the AI era.
Kim of Datacrunch echoed these views, adding that Samsung must rethink its internal culture and operations. To maintain its technological edge, it must develop faster chipmaking processes, particularly below the 2-nanometer threshold.
Foundry Struggles and Competitive Landscape
Despite its resources, Samsung continues to lag behind in the global semiconductor foundry market, where TSMC maintains overwhelming control. Hwang estimated that even under optimal conditions, it might take Samsung two decades to secure a 20 percent market share. He added that spinning off its foundry business might not solve the underlying challenges.
He observed that Samsung’s real power lies in its memory and system LSI sectors, not in contract chip production. Attempting to match TSMC’s scale, he warned, would be futile. “They must use their memory strength strategically instead of building another foundry empire,” he said.
Currently, TSMC commands about 70 percent of the foundry market, while Samsung sits at approximately 7.3 percent. Hwang highlighted how TSMC’s independence from its clients helps maintain trust, whereas Samsung’s integrated business model can sometimes cause hesitation among potential partners.
He noted that Taiwanese firms place deep value on integrity and collaboration. “Our principle is to avoid direct competition with our clients,” he said, describing how this philosophy reinforces TSMC’s leadership.
Investing in the US for Growth
Both Hwang and Kim dismissed the idea that building chip factories in the United States would compromise their nations’ technologies. Instead, they said such moves are essential to secure access to the world’s largest semiconductor market.
Kim explained that relocating some operations abroad can help address labor shortages in aging societies like South Korea and Taiwan. He emphasized that attracting skilled professionals through international cooperation is key to sustaining innovation in AI-driven industries.
Hwang supported this view, asserting that the United States remains the global hub of technological and economic influence. He cited the combined $22 trillion valuation of the top eight American companies and noted that US firms generate around 70 percent of the global chip market’s value.
He added that supporting the American semiconductor ecosystem ultimately benefits all players worldwide. Because nearly 90 percent of the US economy is consumption-driven, he argued that countries like Korea and Taiwan must develop highly competitive chip industries to stay relevant in global supply chains.
The Power of Collaboration
Kim strongly advocated for deeper collaboration across governments, industries, and academic institutions to strengthen the semiconductor ecosystem. He warned that without unity, the sector risks becoming fragmented and less resilient.
He suggested that governments must actively prevent diplomatic conflicts from disrupting chip supply lines. Meanwhile, companies should establish global standards that promote cooperation rather than competition. He also underscored the importance of nurturing a global workforce capable of adapting to rapid technological shifts.
Using examples like TSMC’s joint venture in Japan and new manufacturing sites in the US, Kim said international partnerships are now a necessity. “Korea has a habit of doing everything alone,” he noted. “We need to mix ideas and resources if we want a stable future.”
Turning to China, Hwang described it as both an indispensable partner and a formidable competitor. He predicted that the country would pursue gradual policy evolution rather than abrupt change. Although its industrial model may shift over time, China’s dominance in robotics, mobile technology, and AI-driven systems will continue to expand.
Hwang said China’s integrated market gives it a unique advantage in developing advanced industries. As global powers like the US and China race to set new technological standards, he cautioned that the competition for leadership in emerging technologies will become increasingly intricate. Still, he believed China’s future strategies would lean toward cooperation rather than confrontation.
The Road Ahead
Samsung’s survival in the AI era will depend on its willingness to shed outdated models and embrace bold experimentation. The company must balance innovation with collaboration, using its core strengths while adapting to an evolving global landscape.
If Samsung can evolve as dynamically as the industry itself, it could reclaim leadership in the new technological age. But if it clings to past strategies, even its vast resources might not be enough to withstand the disruptive force of artificial intelligence.
