Samsung is a large industrial corporation specializing in the production of household appliances, televisions, smartphones, semiconductors, memory chips, and integrated systems. Based in Suwon, South Korea, this company is today one of the most famous brands in the world of technology and accounts for a significant portion of the country’s exports.
First steps
Samsung was founded on March 1, 1938, by Lee Byung-chul as a trading store for groceries in Taegu. He bought noodles and various other products from the local market and exported them to China and nearby regions. The company’s name – Samsung – means “three stars” in Korean. After the Korean War, Lee expanded his business further, launching one of the country’s largest wool factories.
Lee focused his activities on industrialization, aiming to contribute to Korea’s post-war economic recovery. During this period, his company grew rapidly thanks to the protectionist policies implemented by the government – supporting large local conglomerates, protecting them from competition, and creating favorable financing conditions.
By the late 1950s, Samsung had taken control of three major commercial banks in Korea, an insurance company, as well as cement and fertilizer plants. In the 1960s, the company acquired several more insurance companies, an oil refinery, a nylon production facility, and a department store. This laid the foundation for the company’s leadership not only in industry but also in the financial sector.
Development in industry and production
In the 1970s, to ensure competitiveness in the textile industry, Samsung established a complete production chain – from raw materials to finished products. During this period, new subsidiaries such as Samsung Heavy Industries, Samsung Shipbuilding, and Samsung Precision Company (later Samsung Techwin) were established. The company also actively invested in heavy industry, chemical and petrochemical sectors, creating a solid foundation for its sustainable growth.
Introduction to Electronics
Samsung entered the electronics industry in 1969, establishing several divisions. The company’s first product was black and white televisions. By the 1970s, Samsung began exporting consumer electronics products to the international market. By that time, it had already become one of Korea’s largest manufacturers and acquired a 50% stake in Korea Semiconductor.
Technological progress
In the late 1970s and early 1980s, Samsung entered a phase of rapid expansion in technological fields. Separate semiconductor and electronics divisions were established within the company, and a new division for the aviation industry was opened. Due to the growing need for IT solutions for enterprises, Samsung Data Systems (now Samsung SDS) was established. This move allowed the company to quickly gain a leading position in the field of information technology services.
In addition, Samsung established two research institutes, expanding its technological activities in the following areas: electronics, semiconductors, high polymer chemistry, genetic engineering, telecommunications, aviation, and nanotechnology.
Becoming a global company
After the death of the company’s founder, Lee Byung-chul, in 1987, leadership passed to his son, Lee Kun-hee. Samsung was divided into five independent companies. The electronics sector remained under Lee Kun-hee’s control, while the other four companies were managed by his siblings.
Lee Kun-hee acknowledged that Samsung’s dominant position in the local market had led it into an overly comfortable zone and that the company was not ready for global competition. He told the company’s leaders: “Change everything except your wife and children.”
As part of his “new management” concept, Samsung required leaders to openly admit their mistakes and gave lower-ranking employees the right to criticize. He prioritized quality over quantity, appointed women to senior management positions, and reduced bureaucracy.
Leadership and challenges
As a result of Lee Kun-hee’s fundamental reforms in Samsung’s internal culture, the company continued to expand in the global electronics market. However, the 1990s were marked not only by achievements but also by a series of serious corporate conflicts. Samsung faced multiple patent infringement claims and bribery cases.
In 1996, Lee Kun-hee was found guilty of bribing former president Roh Tae-woo. He was sentenced to two years in prison, but the judge suspended the sentence, and in 1997 he was pardoned.
Despite this, Samsung maintained steady growth in technological potential and product quality. The company’s semiconductors, computer monitors, and LCD screens entered the top five in terms of global market share in their respective categories.
Leadership in smartphones and consumer technologies
In the 2000s, Samsung achieved great success in the global technology market by creating its Galaxy smartphone series. These products not only became the company’s most popular devices but also ranked among the world’s best-selling smartphones. Additionally, Samsung supplied microprocessors for Apple’s early iPhone models and has been one of the largest microchip manufacturers throughout the 20th and 21st centuries.
Since 2006, Samsung has been the world’s best-selling television manufacturer. In 2010, the Galaxy line expanded into the tablet segment with the Galaxy Tab, and in 2013, smartwatches entered the market with the Galaxy Gear. In 2019, the company introduced its first foldable smartphone, the Galaxy Fold.
In April 2008, Lee Kun-hee was arrested on charges of breach of trust and tax evasion and resigned as chairman of Samsung shortly after. He was found guilty of tax evasion, fined nearly $80 million, and given a three-year suspended sentence. In December 2009, he was pardoned by the South Korean government, which allowed him to remain part of the International Olympic Committee and lead South Korea’s bid to host the 2018 Pyeongchang Winter Olympics.
Leadership and developments after 2010
In March 2010, Samsung Group’s management reinstated Lee Kun-hee to lead the conglomerate’s largest division – Samsung Electronics. Shortly after, he resumed his role as chairman of the entire Samsung Group. In 2014, Lee Kun-hee suffered a heart attack and fell into a coma. Although he retained his official positions, his son, Lee Jae-yong (Jay Y. Lee), began functioning as the de facto leader of Samsung Group.
In 2017, Lee Jae-yong was found guilty of bribing former president Park Geun-hye and sentenced to prison. A year later, his sentence was suspended, and he was released on probation. However, this decision was later overturned, and he was returned to prison in January 2021. After seven months, he was released on parole.
During Lee’s imprisonment, the company’s management was divided between two, and later three, co-CEOs. Meanwhile, Lee faced charges for another financial crime in 2020. This case stemmed from a merger process carried out in 2015 between two subsidiaries of the company. The government alleged that during the merger, the companies’ values were deliberately manipulated, through which Lee attempted to consolidate complete control over Samsung.
After Lee Kun-hee’s death in 2020, his son Lee Jae-yong officially took control of Samsung Group. In 2022, he was appointed executive chairman of Samsung Electronics. Under his leadership, the company focused on advanced areas such as artificial intelligence (AI) and next-generation semiconductor production technologies.
In the early 2020s, Samsung’s semiconductor division experienced a decline in global demand and a drop in sales. To address this issue, production volumes were reduced, and significant investments were made in the production of high-end chips. In the mobile device segment, the Galaxy line was expanded with new foldable smartphones – Galaxy Z Flip and Galaxy Z Fold. The company also introduced new smartwatches and smart home products to the market. Samsung’s television production sector continues to remain one of the company’s main strengths.
Prepared by Zukhrakhon Mansurova
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