[40 Years of the Tokyo Declaration] ① "Why Must We Pursue Semiconductors?"... The 'Day' That Changed Samsung's Fate

[Asia Economy Reporter Park Sun-mi] "Why must we engage in the semiconductor business? It is to secure competitiveness for the nation, its people, and ultimately in the global market."

February 8 marks the 40th anniversary of the late Lee Byung-chul, the founding chairman of Samsung Electronics, deciding to enter the semiconductor business and announcing the 'Tokyo Declaration.' It is no exaggeration to call this the day Samsung’s fate was changed, as the semiconductor business now accounts for 70% of Samsung Electronics' total operating profit.

Forty years ago, on February 8, 1983, Chairman Lee Byung-chul made the decision to enter the semiconductor business after much deliberation while in Tokyo. Earlier, in December 1974, Samsung Electronics had acquired Korea Semiconductor, which was on the brink of bankruptcy, and started the semiconductor business. However, lacking its own technology, it barely survived the crisis, becoming the group's 'ugly duckling.'

Judging that the slow progress in the assembly-focused semiconductor business could no longer be tolerated, Chairman Lee, while staying at the Okura Hotel in Tokyo to plan the New Year's business strategy, decided after much thought to make a large-scale investment in semiconductors. The words of Dr. Inaba Hideo, whom he met in Japan, about 'light, thin, short, and small (輕薄短小)' semiconductors shaping the future of the industry, also strengthened his resolve. Chairman Lee was so passionate about the semiconductor business that he officially announced his commitment to it both internally and externally just a month later.

The atmosphere was dismal. There was strong opposition and cynicism from the business community, with comments like "It will fail within three years" and "It's risky to pursue cutting-edge technology when we can't even make TVs properly." This was understandable since at the time, Korea was barely producing high-density integrated circuits (LSI) for home appliances, let alone very-large-scale integration (VLSI). The semiconductor business was considered feasible only under conditions such as a population over 100 million and a GNP (Gross National Product) exceeding $10,000. Korea met none of these criteria at the time, and the environment was deemed unsuitable for semiconductor business development.

However, Chairman Lee judged that semiconductors perfectly aligned with his management philosophy of 'Business for the Nation (事業報國).' This philosophy means contributing and serving the nation, society, and ultimately humanity through business. He believed the semiconductor business could change the country's future and contribute to 'national benefit and people's welfare (國利民福),' choosing to confront the challenge head-on.

While the decision was difficult, the large-scale investment proceeded swiftly. Alongside the 1983 declaration to enter the semiconductor business, Samsung chose mass-producible DRAM as its first memory product. Starting development of the 64K DRAM, the leading product in the global DRAM market at the time, in May of that year, Samsung succeeded in developing the 64K DRAM domestically for the first time on December 1. This achievement narrowed the technological gap with the U.S. and Japan, which had been over ten years, to about four years in a single leap. Just over a year after the Tokyo Declaration, on May 17, 1984, the completion ceremony for Samsung Semiconductor’s Giheung Plant 1 was held. Korea became the first domestic and third international semiconductor producer.