Semiconductors are big business. In fact, chips represent $30 billion of Samsung’s estimated $140 billion revenue. Despite their rivalry in Smartphones, Apple is Samsung’s largest applications process customer and uses various components such as semiconductors and display products (see the Quarterly Application Processor Market Share Tracker from Strategy Analytics: “Samsung semiconductor is not fighting against Apple”, says Dr. Stephen Woo, President of Samsung Electronics Device Solutions. “We innovate by maintaining the start-up spirit”. Dr. Woo discussed Samsung’s approach to innovation last week at the HTIA Conference in Jerusalem and will make a similar keynote at CES.
After a disastrous M&A experience with California-based AST in 1994, Samsung waited 13 years for its next non-Korean acquisition, Israeli image sensor company, Transchip. This union has been more successful. Currently, Samsung has two R&D Centers, one for semiconductors and another concentrating on telecoms, employing about 400 people. The Ramat Gan facility focuses on imaging solutions using CMOS Image Sensors (CIS), SoC (System on Chip), Digital imaging processors, Image Signal Processing (ISP) engines for CIS and software / hardware designs. For its part, Apple purchased local SSD player Anobit last year for nearly half a billion dollars and promptly opened an R&D Center in Haifa, home of the leading technical university in Israel, the Technion.
“Samsung is a global company, and we appreciate contributions from our R&D center in Israel”. One example is “the recently announced Galaxy Camera (http://www.samsung.com/in/promotions/galaxycamera), launched in May, which is using a camera sensor developed by Samsung’s Israeli R&D center, called SIRC, located at Ramat Gan”. Image sensors, the key technology enabler for camera phones, digital cameras, video cameras, PC cameras and security / surveillance, “are an important source of competitive advantage”. Research company GII predicts 2.44 billion handsets with cameras will be sold this year, 84.8% of all mobile phones. Samsung recently launched its flagship Galaxy S3 Android handset, and expects to achieve sales of 30 million Galaxy S3 units this year.
“Customers need very high performance dual core and SoC (system on chip) solutions that better enable applications but reduce power consumption. On the architecture side, it is like a hybrid car, which uses electric power in the city but needs an engine on the highway. For those applications in which high performance is not required, we use low power consumption processors. When needed, we can offer application providers the right match for high power consuming applications. On the processor side, this year Samsung will make the world’s most number of 32/28 namometer wafers, which further reduces power usage”.
At Samsung since 2003, Dr. Woo was appointed general manager of the System LSI Business in 2008. He currently oversees all activities surrounding the System LSI Business, including logic solutions that provide next-generation features in consumer and mobile products. Samsung’s System LSI Business dominates global market share in several product categories, including mobile application processors for Smartphones, complementary metal oxide silicon-based (CMOS) camera image sensors, flat panel display driver ICs (integrated circuits) and smart card ICs for SIM (Subscriber Identity Module) cards.
Much of Dr. Woo’s role is to ensure “a lot of cross-fertilization within our R&D Centers around the world” and encourage a culture of innovation. “People think of Samsung as this big company, but we really aren’t. We innovate by maintaining the start-up spirit”
* Levi Shapiro is a Professor in the Media Innovation Lab at IDC and Partner at TMT Strategic Advisors He works with media and technology companies from Tokyo to Tel Aviv and is a regular columnist at the Jerusalem Post.