[Semiconductor History]③ Letter from 'Semiconductor Pioneer' Dr. Kang Ki-dong to Chairman Lee Kun-hee

Several Letters Sent in July 2006, March 2011, etc.
"Korean Semiconductor Erased and Recorded as Done by Someone Else"

[Asia Economy, So Jong-seop, Trend & Weekend Managing Editor] The history of semiconductors in the Republic of Korea began on January 26, 1974, with the establishment of Korea Semiconductor Co., Ltd. (hereinafter Korea Semiconductor) in Bucheon, Gyeonggi Province. The founder of this first semiconductor company in Korea was Dr. Kang Ki-dong. Former Samsung Electronics Chairman Kang Jin-gu wrote in his autobiography (Goryeo Won, 1996), “Kang Ki-dong’s Korea Semiconductor was the first to establish a full-scale semiconductor factory in the then uncharted territory of semiconductors.”

Korea Semiconductor was later acquired by Samsung and became Samsung Semiconductor, which continues today as Samsung Electronics. Therefore, Dr. Kang is called the ‘pioneer of Korean semiconductors’ and ‘the person who sowed the seeds of semiconductors.’ He claims, “At the time in 1974, during the transfer of shares, Samsung promised to give 10% of the semiconductor shares on the condition of mass production and export.” However, he has not presented clear evidence to prove the ‘10% share.’ The key figures related to this matter, former Samsung Group Chairmen Lee Byung-chul and Lee Kun-hee, and former Samsung Electronics Chairman Kang Jin-gu, are no longer alive.

It is noteworthy that Dr. Kang sent at least two letters to former Samsung Group Chairman Lee Kun-hee more than ten years before making these claims public, but verifying their authenticity does not seem easy. Asia Economy summarizes the main contents of the letters sent by Dr. Kang as part of recording the history of Korea Semiconductor.

[July 2, 2006]

~ Chairman, when you acquired my company in 1974, you gave me 10% of the shares of Korea Semiconductor. As mass production and sales, which were conditions of the acquisition, were successfully carried out, I requested my shares when I left the company in 1976. At that time, Chairman Lee Byung-chul accepted my request on the condition of ‘if you make money.’ After that, I kept urging President Kang Jin-gu. He said, “Would Samsung really take away that mere 10%?” and asked me to wait a little longer because a huge amount of money was being invested, and it was impossible to ask for money now. I have believed that as long as Samsung and President Kang Jin-gu are there, this promise will surely be kept.

My C-MOS mass production technology remains the root of today’s Samsung Semiconductor and is still thriving. As a pioneer of the Korean semiconductor industry, I introduced advanced technology that cannot be bought with money simultaneously to the U.S. and Samsung. Samsung then devoted all efforts to expanding production capacity based on this technology. ~

[March 30, 2011]

~ I sincerely respect the Chairman’s capability in growing Samsung into the world’s top electronics company as a former member of old Samsung. ~ The Chairman promised to give me 10% of the shares of the acquired company once the mass production technology was established and all products were exported. When I left in 1976, export performance was $4,184,989, more than four times the capital. This fact is also recorded in the 10-year history of Samsung Semiconductor & Telecommunications.

The wristwatches I made were supplied to the Blue House and used as gifts for foreign dignitaries, and the Ministry of Commerce, Industry and Energy prepared a plan to develop the electronic watch business to Swiss standards, dispatching investigation teams overseas, which greatly elevated my status overnight. Samsung obtained the C-MOS technology, which it could not have bought even with a large sum of money, for free. I have never received any monetary compensation, including salary, from Samsung. My salary was paid by ICII, a company I first established in the U.S. After that, the history of Korea Semiconductor Co., Ltd. was erased, and all my work was deleted or recorded as done by someone else.

Chairman, please accept everything as it is and revive the erased history of Korea Semiconductor Co., Ltd., adding a new legend to the pioneering history of the Korean semiconductor industry. The history is not erased just because the company’s name changed. ~

(The <30-Year History of Samsung Electronics> recorded the acquisition of Korea Semiconductor by Samsung as follows: ‘Korea Semiconductor’s management deteriorated severely due to excessive investment while establishing a full-scale production system. Product production was delayed compared to plans, leading to serious financial difficulties. As product development intensified with the completion of the factory, continuous investment was required, increasing financial pressure.

Chairman Lee Kun-hee foresaw the future potential of the semiconductor business and acquired 50% of Korea Semiconductor’s Korean investment shares in 1974 with personal funds ($500,000). At that time, Samsung Electro-Mechanics and Samsung Electro-Mechanics were struggling, so the group had neither the capacity nor justification to invest again in the electronics business. Moreover, the secretariat judged that Korea Semiconductor had no business viability. Knowing that the group’s acquisition of Korea Semiconductor would not be easy, Chairman Lee actively pushed for the acquisition. On December 30, 1977, Samsung acquired the remaining shares of Korea Semiconductor held by the U.S. company ICII. On March 2, 1978, the company name was changed to Samsung Semiconductor.’)