[Interview] Warning from the Author of 'Hidden Heroes': "The Crisis Now Is Worse Than the Memory Chicken Game"

Interview with Im Hyung-kyu, Former Samsung Electronics President
'Engineer Skill Level Equals Company Competitiveness'
"Samsung Faces Bigger System Challenges Than Memory Era"

"Silicon Valley was a man-made paradise full of new things to learn and explore."

This is a passage from a recent book written by a Korean international student who studied in Silicon Valley, USA, during the 1980s. He returned to the Korean company that sent him abroad, leaving behind this artificial paradise. What he learned became the cornerstone of South Korea's semiconductor industry development. This is the story of Lim Hyung-kyu, former president of Samsung Electronics.

He joined Samsung Semiconductor (the predecessor of Samsung Electronics Semiconductor) as an engineer in 1976 and worked there for 30 years. Later, he served as an internal director at SK Hynix. His life is essentially the history of Korean semiconductors. Recently, Lim published a book titled , which covers the history and challenges of the Korean semiconductor industry. We met with former President Lim.

Top Students Nationwide Enter Engineering... 'Talent' Was Key in Korea's Semiconductor Growth Era

―Looking at your book, it seems Korea once made a life-or-death effort to secure semiconductor talent.

"In the 1970s, the top students nationwide entered electronic engineering departments. The government worked hard to increase talent in science and engineering fields. In 1971, the Korea Advanced Institute of Science (formerly KAIST), a special graduate school, was established. They brought in young professors who had studied in advanced countries with exceptional treatment. Enrollees were also granted military service exemptions. I graduated from Busan Gyeongnam High School as the top student in my class and entered Seoul National University’s electronic engineering department. The second-ranked student went to mechanical engineering. That was the social atmosphere at the time."

―Why did you join a semiconductor company?

"After studying electronic engineering, I found semiconductors the most interesting. Around graduation, I saw a recruitment notice from Korea Semiconductor. They offered to send new hires to a master's program at the Korea Advanced Institute of Science, which attracted me. Samsung had acquired Korea Semiconductor and was striving to secure talent. After fierce competition, I joined the company. I started studying at the Korea Advanced Institute of Science in 1976."

―Why is talent so important?

"Ultimately, the quality of engineers determines a company's technological competitiveness. When the memory semiconductor market battle was raging, domestic engineers were at a higher level than competitors like Japan. Nowadays, excellent science and engineering talent often go to medical schools or platform companies. The nation must have the will to secure semiconductor talent."

'Hidden Heroes' featuring a conversation between former President Lim and National Assembly member Yang Hyang-ja /
Photo by Kim Pyeonghwa

Rapid Market Entry Laid the Foundation for Memory Leadership

―When did you take charge of memory semiconductor work?

"I returned to the company after graduating from the Korea Advanced Institute of Science in early 1978. From then on, I worked in the memory business department. In 1981, I was selected as Samsung's first overseas trainee. I earned a Ph.D. in the U.S. and worked at Samsung's local memory research lab."

―What kind of place was the memory research lab?

"It was where D-RAM was developed under the leadership of fun engineers Dr. Lee Sang-jun and Dr. Lee Il-bok. They hired local memory technicians to operate it. In 1984, about 30 new engineers, including myself who joined through military service exemption, were dispatched. We helped the company achieve memory technology independence after acquiring skills in the U.S. We had such a strong sense of mission that we even sang the national anthem at company dinners."

―How did Samsung achieve technological independence?

"After returning in 1985, I worked at the Giheung Semiconductor Research Center. It was two years after Samsung Electronics declared its entry into the memory business. We worked seven days a week?Monday through Sunday. Thanks to the members' efforts, we quickly improved semiconductor technology. In fact, Korea entered the memory market relatively early, making it easier to catch up with advanced technologies. Samsung Electronics developed the 1M D-RAM with its own technology in 1986. Since then, it introduced various technologies and products, achieving complete technological independence."

―What was it like when Samsung first became number one in the memory market?

"Samsung Electronics ranked first in the global D-RAM market by shipment volume in 1992 for the first time. The following year, it also became number one in the overall memory market. At that time, its technology was not superior to Japan’s, but it pushed through with production volume. By the late 1990s, Samsung surpassed Japan in technology as well. It was a time when Samsung had twice as many engineers as competing companies. We also overcame the D-RAM crash period when prices plummeted. Samsung survived by strategically positioning various D-RAM products. We reduced production of products with collapsed prices and relatively increased production of products that could fetch proper prices. This strategy was possible because we produced a variety of products. As a result, Samsung was reborn as the number one memory semiconductor company."

Bigger 'System' Barriers Than Memory Challenges

―Recently, the semiconductor support law issue has stirred up the industry.

"It’s unfortunate. Politicians think large companies will grow on their own and are reluctant to provide support. The market assumes the memory number one title will last forever. That’s not true. I believe the current situation is more critical than when the memory business leadership was contested in a chicken game. One reason I wrote was to find ways to overcome the current crisis based on past experiences."

―Why do you see the current situation as more critical?

"Samsung Electronics is making huge profits from the memory business, but it’s not time to be complacent. The U.S. continues to keep it in check. Moreover, Samsung’s competitiveness in the system semiconductor field is weak. It ranks second in both foundry and image sensor markets. Closing the gap with the number one is not easy."

―Do you think Samsung Electronics can catch up with TSMC?

"In the semiconductor market, second place doesn’t make money. For example, if the market leader has a 40% share and the second place has about 20%, the sales difference is about twice, but the profit difference exceeds tenfold. In fact, the profit gap caused by market share differences is even greater in the system sector than in memory. It’s a tough fight for Samsung Electronics. It’s unlikely the ranking will be reversed in the next few years."

―What should Korea do to gain competitiveness in semiconductors?

"Ultimately, the government must step up. It needs to create an environment that can increase the number of excellent engineers. Only then can the system semiconductor industry grow like memory did. Taiwanese talent all go to semiconductor companies including TSMC. The future of Korea’s semiconductor industry depends on the foundry sector. Comprehensive government support is necessary."