[Bae Byung-man's Perspective] The Glorious 190 Trillion Won K-Semiconductors: Solve the Intricate Puzzle of the 'Superiority Strategy'

*This content was translated by AI.View Original

Samsung Electronics and SK hynix, the pillars of the South Korean economy, once again set a historic milestone in the third quarter of this year. Samsung Electronics recorded an operating profit of 107.4405 trillion won in the third quarter, setting a new all-time high for the fourth consecutive quarter, and generated an astonishing profit of 106.5 trillion won from its semiconductor (DS) division alone. SK hynix also achieved an operating profit of 83.3338 trillion won in the third quarter, driven by demand for high-value-added AI memory, breaking its own record for the sixth consecutive quarter.

The combined operating profit of the two companies this quarter approaches 190 trillion won. This result clearly proves that the two companies are not merely growing as individual firms but are key players in the global supply chain and the most reliable pillars driving the South Korean economy across all fronts.

Such dazzling achievements directly translate into a virtuous cycle for the domestic economy. The massive profits earned by the two companies are reinvested through large-scale facility investments, the creation of high-quality jobs, and astronomical tax revenues, serving as a core driver that strengthens the fundamental resilience of the Korean economy. Particularly noteworthy is the fact that they are not solely focused on external growth but are actively implementing shareholder return policies to foster the maturity of the domestic capital market. Their forward-looking moves to maximize shareholder value, such as expanding dividends and conducting share buybacks and cancellations, are setting a benchmark for exemplary ESG management that resolves the chronic 'Korea Discount' in the domestic stock market and shares the fruits of success with global investors.

Interestingly, the victory of cutting-edge technology led by these semiconductor giants is also generating deep synergy with the various Hallyu (K-Culture) trends sweeping the world today. As Korean cultural content such as K-pop, K-dramas, K-food, and K-beauty captures the hearts of people worldwide, the brand value and trust in 'Made in Korea' have reached unprecedented heights. Favorability toward Korean culture is leading to a preference for Korean high-tech products, while conversely, the world's top semiconductor technology is imprinting the national brand of South Korea on the global stage, serving as a solid technical and economic rear base that supports the spread of K-culture.

However, even amid this record-breaking boom, there are no few concerns for the future, making it impossible to feel at ease. The global semiconductor market is facing increasingly intensifying geopolitical risks, including pressure for supply chain diversification due to the US-China power struggle and a subsidy war centered on domestic production.

In particular, since the inauguration of the second Trump administration, the introduction of universal tariffs and concerns over the reduction of subsidies under the CHIPS Act (Semiconductor Support Act) have become reality, pushing the burden of local investment and uncertainty for domestic companies to their peak. In addition, as AI investments by big tech companies show signs of overheating, there are 'Peak-out' concerns that demand may slow down or prices may be adjusted in the future, along with the fierce pursuit by latecomers, which is a threat that cannot be ignored. As seen in the operating losses experienced by Samsung Electronics' finished product (DX) division, the slowdown in consumption in downstream industries due to prolonged high interest rates and high inflation remains a persistent risk.

Ultimately, to maintain the current dominant position, a meticulous and sophisticated management strategy that is not shaken by drastic changes in the external environment is more urgent than ever.

First, a 'geopolitical diplomacy and investment coordination strategy' to offset second Trump administration risks is urgently needed. To counter concerns over subsidy reductions, flexible speed control is required to adjust the completion timing of the Taylor (Samsung Electronics) and Indiana (SK hynix) plants in the US and the scale of additional investments. Simultaneously, within the transition period from Biden to Trump, it is essential to use as a sophisticated leverage the fact that Korean corporate investment directly contributes to supply chain security and job creation in the US, thereby securing exclusive benefits that offset penalties. Diversifying raw material supply chains to Europe, Southeast Asia, and India based on a 'China Plus One' strategy to minimize the impact of US-China conflicts is also an essential task.

Furthermore, they must stake everything on a 'next-generation superiority R&D strategy' to instantly dispel peak-out concerns. To fully launch next-generation HBM shipments and secure a leading position in the custom market, Samsung Electronics must elevate its in-house foundry process integration capabilities, while SK hynix must raise its partnership system with TSMC to a higher level to supply big tech custom solutions in a timely manner.

Moreover, they must lead global standards for CXL (Compute Express Link) and PIM (Processing-in-Memory) technologies that overcome memory limitations to maintain the gap with latecomers. In the case of Samsung Electronics, only by achieving complete yield stabilization of sub-3nm GAA processes can it catch two rabbits at once: internalizing chips in its finished product (DX) division and securing orders from major customers, which is necessary for a turnaround in its foundry plan.

Additionally, a 'customer diversification and flexible production system' must be established to break the structure biased toward specific customers. To disperse market volatility risks, high-performance memory supply channels must be expanded beyond North American tech giants (MS, Google, Amazon, Meta) to completed vehicle manufacturers designing their own AI chips and global telecommunications companies. It is also urgent to secure flexibility in CAPEX operations by converting the production ratio between general-purpose lines and high-value-added lines in real time through advanced demand forecasting models based on artificial intelligence.

Finally, there is a 'K-culture-linked global brand leverage strategy' that connects the Hallyu trend, which has captivated the world, to breaking through the sluggishness of the finished product division. Based on its unparalleled semiconductor hardware competitiveness, it must build an On-Device AI ecosystem where consumers worldwide can most comfortably consume Hallyu content. For example, this involves embedding high-performance AI semiconductors in Galaxy smartphones and smart TVs, and exclusively combining them with optimized platforms dedicated to globally popular K-content or high-performance AI translation and subtitle services. This will become a differentiated ecosystem that strongly binds the trust in 'Made in Korea' to consumer goods purchases.

The two companies, which are driving the national economy with overwhelming results and contributing to the expansion of cultural territory, stand in a harsh global reality where crisis and opportunity coexist. It is expected that the meticulous management strategy, allowing for no margin of error, established by K-semiconductors will become the power to carry the South Korean semiconductor myth to the next generation, going beyond mere corporate survival.

Bae Byung-man, Chief Correspondent for Industry and Leisure

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*This content was translated by AI.View Original