The semiconductor industry has grown rapidly ever since the invention of the transistor at Bell Laboratories in 1947. Throughout the industry's relatively short history, many nations have competed intensely to take the lead. In the early stage of its development the semiconductor industry was overwhelmed by the U.S., but by 1986 the world market came to be dominated by Japan. In 1993 it was witnessed the U.S. recapturing its lead in the world market.
The Korean business conglomerates, starting in the early 1980's, adopted a strategy focused on memory products. The Korean semiconductor industry came to dominate the DRAM market by 1992 and in 1993 took the lead in the overall MOS Memory market. However, even though it grew successfully, the Korean semiconductor industry was weakened considerably due to its almost exclusive emphasis on memory products. As a consequence, in 1996 the over-supply of DRAMs and ensuing price slump dealt a powerful blow to Korean semiconductor business, who in concert with the government are now taking steps to diversify and strengthen non-memory segments. Namely, the success story of the past must be studied in order to adjust the business structure and ensure ongoing expansion in the future.
In the present study, the history of the semiconductor industry under such circumstances aforementioned has been considered in finding out how the sources of competitive advantage have changed, as well as the factors which may influence competitive advantage in the future. This study identify the Korean industry's competitiveness through a comparative study of the American, Japanese, Taiwanese, and Korean semiconductor industries. Finally, by comparing the product structure and corporate strategies of the three Korean semiconductor companies (Samsung, Hyundai, LG) against one U.S. company (Intel) and two Japanese companies (NEC and Toshiba), it suggests the necessary steps for strengthening the Korean semiconductor industry's competitiveness and improving its product structure.
