The Comprehensive History of Samsung: From Trading Company to Global Electronics Leader

Samsung Headquarters

Samsung Group (Korean: 삼성; Hanja: 三星; RR: samseong [samsʌŋ]) is a South Korean multinational manufacturing conglomerate, with its headquarters in Samsung Digital City, Suwon, South Korea. As the largest chaebol in South Korea, Samsung has evolved from a modest trading company founded in 1938 by Lee Byung-chul into a global powerhouse in electronics, shipbuilding, construction, and more. This article delves into Samsung’s rich history, its strategic expansions, and the impact it has made on global industries.

Founding and Early Years: The Birth of Samsung

Samsung began as a trading company in 1938, founded by Lee Byung-chul. Initially focused on food processing, textiles, insurance, and retail, Samsung quickly expanded its scope. This section explores the company’s early diversification efforts and how they laid the groundwork for its future success.

Early Beginnings: 1938–1970

Samsung Group was founded by Lee Byung-chul in 1938 in Daegu, during the Japanese occupation of Korea. Initially known as Samsung Sanghoe, the company started as a small trading firm with just forty employees, dealing in dried fish, local groceries, and noodles. As the company prospered, Lee moved the headquarters to Seoul in 1947.

In response to the challenges of the Korean War, Lee Byung-chul established a sugar refinery in Busan, named Cheil Jedang. By 1954, he expanded into the textile industry, founding Cheil Mojik and building the country’s largest woolen mill in Daegu. This period marked the beginning of Samsung's diversification into various industries, including insurance, securities, and retail.

Expansion and Electronics Era: 1970–1990

In the late 1960s, Samsung made a strategic move into the electronics industry, establishing divisions like Samsung Electronics Devices, Samsung Electro-Mechanics, and Samsung Semiconductor & Telecommunications. The company’s first electronic product, a black-and-white television, marked the beginning of Samsung’s rise in the global electronics market.

The 1980s saw Samsung further solidify its presence in the telecommunications industry by acquiring Hanguk Jeonja Tongsin, which eventually became the hub for Samsung’s mobile phone production. This era also saw the expansion of Samsung Electronics into international markets, with manufacturing plants set up in Portugal, New York, Tokyo, and England.

Following the death of Lee Byung-chul in 1987, Samsung Group was divided into five separate business entities: Samsung Group, Shinsegae Group, CJ Group, Hansol Group, and JoongAng Group. Each of these groups operated independently, marking a new chapter in Samsung’s history.

Globalization and Innovation: 1990–2000

In the 1990s, Samsung accelerated its global expansion, particularly in the electronics sector. The company became the world’s largest producer of memory chips in 1992 and later pioneered the development of liquid-crystal display (LCD) panels. A notable joint venture with Sony, known as S-LCD, was established to produce LCD panels, further cementing Samsung’s position as a leader in the display market.

Despite the challenges of the 1997 Asian financial crisis, Samsung emerged relatively unscathed, though it did sell its automotive division, Samsung Motors, to Renault. During this period, Samsung also expanded into aerospace, contributing to the formation of Korea Aerospace Industries (KAI) in 1999.

The 21st Century: 2000–Present

The 2000s marked Samsung's evolution into a global technology leader. The company launched its first smartphones under the Samsung Solstice line in 2008, eventually developing the renowned Samsung Galaxy series. In 2012, Samsung surpassed Nokia to become the world’s largest mobile phone manufacturer by unit sales.

However, Samsung faced legal challenges, most notably in 2012, when a U.S. court ruled that the company had infringed on Apple’s smartphone patents, resulting in a significant financial penalty.

In recent years, Samsung has continued to innovate, opening the world’s largest mobile manufacturing facility in Noida, India, in 2018. In 2023, Samsung announced a reduction in memory chip production due to a projected 96% decline in quarterly operating profit, reflecting the challenges posed by a slowing global economy post-COVID.

Samsung's Influence in South Korea

Samsung is not just a company; it's a powerhouse that significantly impacts South Korea’s economic development, politics, media, and culture. Often credited as a driving force behind the "Miracle on the Han River," Samsung has played a crucial role in transforming South Korea into a global economic leader. The conglomerate’s affiliate companies contribute to about one-fifth of South Korea’s total exports, making Samsung a linchpin of the nation's economy. In 2022, Samsung’s revenue was equivalent to 22.4% of South Korea’s $1.67 trillion GDP, underscoring its immense influence.

The extent of Samsung’s power is such that many believe the company holds more sway than the government itself. Woo Suk-hoon, host of a popular economics podcast, remarked, "You can even say the Samsung chairman is more powerful than the President of South Korea. [South] Korean people have come to think of Samsung as invincible and above the law." This sentiment was echoed in a Washington Post article titled "In South Korea, the Republic of Samsung," published on December 9, 2012. Critics argue that Samsung's dominance stifles competition, limits consumer choice, and sometimes involves collusion with other large companies to fix prices while intimidating those who dare to investigate.

Lee Jung-hee, a former South Korean presidential candidate, emphasized this issue during a debate, stating, "Samsung has the government in its hands. Samsung manages the legal world, the press, the academics, and bureaucracy." Such statements reflect the deep-rooted concerns regarding Samsung’s influence over South Korea’s societal structures.

Samsung's Global Operations

Samsung operates a vast network of around 80 companies, with diverse activities spanning construction, consumer electronics, financial services, shipbuilding, and medical services. This extensive range of operations is bolstered by two major research and development stations, which have propelled Samsung into cutting-edge industries such as high-polymer chemicals, genetic engineering, aerospace, and nanotechnology.

As of April 2011, Samsung Group consisted of 59 unlisted and 19 listed companies, all primarily traded on the Korea Exchange. In FY 2009, Samsung reported consolidated revenues of 220 trillion KRW (approximately $172.5 billion). This figure surged to 280 trillion KRW ($258 billion) in FY 2010, with profits of 30 trillion KRW ($27.6 billion), based on a KRW-USD exchange rate of 1,084.5 KRW per USD as of August 19, 2011. These figures do not account for the revenues generated by Samsung’s subsidiaries outside of South Korea, indicating that the conglomerate’s true economic footprint is even larger.

Leadership of Samsung Group

The leadership of Samsung has been passed down through generations, with each leader contributing to the conglomerate’s growth:

• Lee Byung-chul (1938–1966, 1968–1987): The visionary founder of Samsung, Lee Byung-chul, laid the foundation for what would become one of the world’s largest conglomerates.
• Lee Maeng-hee (1966–1968): The first son of Lee Byung-chul, Lee Maeng-hee briefly led the company before stepping down.
• Lee Kun-hee (1987–2008, 2010–2020): The third son of the founder, Lee Kun-hee, is credited with transforming Samsung into a global leader in electronics and technology.
• Lee Soo-bin (2008–2010): Served as interim leader during Lee Kun-hee’s brief absence.

Samsung Affiliates: A Global Powerhouse

Samsung Electronics: The Flagship of Innovation

Samsung Electronics, headquartered in Suwon, South Korea, stands as a global leader in electronics and information technology. As the flagship company of the Samsung Group, it manufactures a wide array of products, including air conditioners, computers, digital TVs, AMOLEDs, mobile phones, display monitors, printers, refrigerators, semiconductors, and telecommunications equipment. In the first quarter of 2012, Samsung Electronics emerged as the world’s largest mobile phone maker by unit sales, securing a 25.4% global market share. Additionally, by 2011, it ranked as the world’s second-largest semiconductor manufacturer, following Intel.

Joint Ventures: Collaborations Across Borders

• Steco: Formed in 1995, Steco is a joint venture between Samsung Electronics and Japan's Toray Industries, focusing on innovative technology solutions.
• Toshiba Samsung Storage Technology Corporation (TSST): Established in 2004, TSST is a joint venture specializing in optical disc drive manufacturing, with Toshiba holding 51% of the stock and Samsung 49%. Samsung Electronics is listed on the Korea Exchange stock market under number 005930.

Samsung Biologics: Pioneering Biopharmaceuticals

Founded in 2011, Samsung Biologics is a leading biopharmaceutical company, offering contract development and manufacturing (CDMO) services, including drug substance and product manufacturing, as well as bioanalytical testing. Headquartered in Incheon, South Korea, Samsung Biologics operates the world’s largest biologic contract manufacturing complex. The company has expanded its development services to San Francisco and is listed on the Korea Exchange under number 207940. Additionally, Samsung Bioepis—a joint venture with Biogen Idec—is at the forefront of biosimilar medicine production, particularly in anti-TNF products.

Samsung Engineering: Building the Future

Samsung Engineering, headquartered in Seoul, was founded in 1969 and is a global leader in construction, particularly in oil refining, upstream oil and gas, petrochemical, and power plants. The company reported revenues of 9,298.2 billion KRW (approximately $8.06 billion) in 2011 and is listed on the Korea Exchange under number 02803450.

Samsung Fire & Marine Insurance: Leading the Insurance Market

Samsung Fire & Marine Insurance, founded in 1952 and headquartered in Seoul, is a multinational insurance provider offering services in accident, automobile, casualty, fire, liability, marine insurance, and personal pensions. As of March 2011, it had operations in 10 countries and served 6.5 million customers, making it South Korea's largest general insurance provider. It is listed on the Korea Exchange stock market under number 000810.

Samsung Heavy Industries: Shipbuilding Excellence

Founded in 1974 and headquartered in Seoul, Samsung Heavy Industries is a global leader in shipbuilding, producing bulk carriers, container vessels, crude oil tankers, and more. With revenues of 13,358.6 billion KRW in 2011, it ranks as the world’s second-largest shipbuilder by revenue, listed under number 010140 on the Korea Exchange.

Samsung Life Insurance: Securing Lives Globally

Samsung Life Insurance, established in 1957 and headquartered in Seoul, is South Korea’s largest provider of life insurance, offering individual life insurance and annuity products. As of December 2011, it had operations in seven countries, serving over 8 million customers. It is listed on the Korea Exchange under number 032830. Samsung Life also holds stakes in joint ventures like Samsung Air China Life Insurance and Siam Samsung Life Insurance.

Samsung SDI: Powering the Future

Samsung SDI specializes in lithium-ion batteries, including those for electric vehicles like the BMW i3. The company acquired Magna Steyr’s battery plant in Graz in 2015 and is expanding production to supply 50,000 cars per year. Samsung SDI also produces CRTs and VFD displays, though it shifted to lithium-ion technology in recent years. The company is listed on the Korea Exchange under number 006400.

Samsung SDS: IT Services Leader

Samsung SDS, founded in 1985, is South Korea’s largest IT service company, specializing in ERP deployment, IT infrastructure, consulting, outsourcing, and data center operations. With revenues of 6,105.9 billion KRW in 2012, Samsung SDS is listed on the Korea Exchange under number 000830.

Samsung Electro-Mechanics: Innovating Components

Established in 1973, Samsung Electro-Mechanics manufactures key electronic components. Headquartered in Suwon, it is listed on the Korea Exchange under number 009150.

Samsung Medical Center: Leading Healthcare Innovation

Founded in 1994, Samsung Medical Center is a state-of-the-art healthcare facility that includes a hospital and Asia's largest cancer center. With 40 departments, 10 specialist centers, 120 special clinics, and over 1,300 beds, it embodies the motto of becoming a "patient-centered hospital." The Samsung Medical Center is involved in cutting-edge research, including a collaboration with Pfizer on genomics research related to hepatocellular carcinoma.

Other Notable Affiliates

• Cheil Worldwide: A leading marketing and advertising company listed on the Korea Exchange (number 030000).
• Samsung C&T Corporation: Focuses on construction, trading, and investment, listed under number 000830.
• Hotel Shilla: A premier hospitality provider listed on the Korea Exchange under number 008770.
• Samsung Card: A leading credit card company, listed under number 029780.

Overview of Key Corporate Transactions and Joint Ventures

Hanwha Techwin Acquisition

Hanwha Techwin, formerly a division of Samsung specializing in surveillance technology, aeronautics, optoelectronics, automation, and weapons, was acquired by Hanwha Group. Announced in December 2014 and completed in June 2015, this acquisition led to a rebranding of the company as Hanwha Techwin. The company is listed on the Korea Exchange under the stock code 012450.

Samsung Thales Co., Ltd.

Initially known as Samsung Thomson-CSF Co., Ltd. until 2001, Samsung Thales Co., Ltd. was a joint venture between Samsung Techwin and the French defense and aerospace company Thales. Established in 1978 and based in Seoul, this venture’s ownership was transferred to Hanwha Group as part of the Techwin acquisition.

Chemical Divisions and Acquisitions

• Samsung General Chemicals: Acquired by Hanwha Group, with a separate chemical division sold to Lotte Corporation in 2016.
• Hanwha Total: A 50/50 joint venture between Samsung and TotalEnergies, focusing on petrochemicals. Samsung’s stake was transferred to Hanwha Group through the General Chemicals acquisition.

Defunct Ventures

• Alpha Processor Inc. (API): Established in 1998 as a joint venture with Compaq to produce DEC Alpha CPUs. The venture involved a $500 million investment from both companies.
• GE Samsung Lighting: A joint venture with General Electric’s lighting division, operational from 1998 to 2009.
• Global Steel Exchange: Formed in 2000 with Cargill, Duferco Group, and Tradearbed to facilitate online steel trading.

Former Subsidiaries

• Samtron: A Samsung subsidiary specializing in computer monitors and plasma displays until 1999. It became an independent brand but was absorbed back into Samsung in 2003.
• S-LCD Corporation: A joint venture between Samsung Electronics and Sony, established in 2004 and fully acquired by Samsung in 2011.

Other Notable Ventures

• Samsung BP Chemicals: A 49:51 joint venture with BP, established in 1989 to produce high-value chemicals for batteries and displays.
• Samsung Corning Precision Glass: A partnership with Corning, founded in 1973 to produce cathode ray tube glass and later LCD glass substrates.
• Samsung Sumitomo LED Materials: A joint venture with Sumitomo Chemical, focused on sapphire substrates for LEDs.

Current Partnerships and Holdings

• Atlântico Sul Shipyard: Samsung Heavy Industries holds a 10% stake in this Brazilian shipyard, which is the largest in South America.
• DGB Financial Group: Samsung Life Insurance is the largest shareholder with a 7.4% stake in this South Korean banking group.
• Corning: Samsung owns 7.4% of this glass and ceramics company, with a long-term supply agreement in place.
• Doosan Engine: Samsung Heavy Industries holds a 14.1% stake in this South Korean heavy industry company.
• Pantech: Samsung acquired a 10% stake in this South Korean mobile phone manufacturer.
• Rambus Incorporated: Samsung owns 4.19% of this American technology company specializing in chip interface technologies.
• Renault Samsung Motors: Samsung holds a 19.9% stake in this South Korean automobile manufacturer.
• Seagate Technology: Samsung owns 9.6% of this American computer storage company and has a seat on its board of directors.
• Sharp Corporation: Samsung holds a 3% stake in this Japanese electronics company.
• Sungjin Geotec: Samsung Engineering owns a 10% stake in this offshore oil drilling company, a POSCO subsidiary.
• Taylor Energy: Samsung Oil & Gas USA Corp. owns a 20% stake in this American oil company operating in the Gulf of Mexico.

Rollei (1995)

In 1995, Samsung Techwin acquired the German camera manufacturer Rollei. Leveraging its optical expertise, Samsung developed a line of Swiss-made watches under the Rollei brand. However, on March 11, 1995, the Cologne District Court prohibited the advertising and sale of these watches in Germany. Subsequently, Rollei’s management bought out the company in 1999.

Fokker Aircraft (1995)

Samsung’s attempt to acquire the Dutch aircraft manufacturer Fokker failed when proposed consortium partners Hyundai, Hanjin, and Daewoo declined to join. This setback prevented Samsung Aerospace Industries from reviving its bid.

AST Research (1995)

In a bid to enter the North American computer market, Samsung acquired a 40% stake in AST Research in 1995. However, the venture struggled with staff resignations and financial losses, leading to the closure of the California-based company.

FUBU Investment (1995)

Samsung’s textile division invested in the American hip-hop apparel brand FUBU in 1995. The investment followed a public appeal for funding by FUBU’s founder in The New York Times.

Strategic Alliance with Rothschild (1995)

Samsung Securities Co., Ltd. formed a strategic alliance with the City of London-based investment bank N M Rothschild & Sons to collaborate on cross-border mergers and acquisitions.

MEDISON Co. (2010)

In December 2010, Samsung Electronics acquired MEDISON Co., a South Korean medical equipment company, marking the beginning of Samsung’s diversification into the medical technology sector.

Grandis Inc. (2011)

In July 2011, Samsung acquired Grandis Inc., a developer of spin-transfer torque random access memory (MRAM). This acquisition was part of Samsung’s strategy to advance its R&D operations in next-generation memory technologies.

Sony LCD Stake (2011)

On December 26, 2011, Samsung Electronics finalized the purchase of Sony’s stake in their joint LCD venture for approximately 1.08 trillion won ($938.97 million).

mSpot (2012)

On May 9, 2012, Samsung Electronics acquired mSpot, a cloud-based music service provider. The acquisition led to the development of Samsung Music Hub.

NVELO, Inc. (2012)

In December 2012, Samsung acquired NVELO, Inc., a storage software vendor based in Santa Clara, California. NVELO was integrated into Samsung’s R&D to enhance software for next-generation SSD storage systems.

NeuroLogica (2013)

In January 2013, Samsung acquired NeuroLogica, a medical imaging company. This acquisition was part of Samsung’s strategy to strengthen its presence in the medical technology sector. Financial terms of the deal were not disclosed.

SmartThings (2014)

On August 14, 2014, Samsung acquired SmartThings, a home automation startup. The acquisition, reported by TechCrunch to be valued at around $200 million, aimed to bolster Samsung’s smart home technology portfolio.

Quietside LLC (2014)

On August 19, 2014, Samsung acquired U.S.-based air conditioner distributor Quietside LLC to enhance its smart home business. Samsung Electronics obtained full ownership of Quietside.

Proximal Data, Inc. (2014)

On November 3, 2014, Samsung acquired Proximal Data, Inc., a pioneer in server-side caching software. The acquisition aimed to enhance Samsung’s capabilities in virtualized systems.

LoopPay (2015)

On February 18, 2015, Samsung acquired U.S.-based mobile payments firm LoopPay, integrating its technology to advance Samsung’s smartphone transaction capabilities.

YESCO Electronics (2015)

On March 5, 2015, Samsung acquired YESCO Electronics, a manufacturer of LED displays. This acquisition focused on expanding Samsung’s digital billboard and message sign offerings.

Viv Labs (2016)

On October 5, 2016, Samsung acquired Viv Labs, a company specializing in artificial intelligence. The acquisition aimed to advance Samsung’s AI technology initiatives.

Rich Communications Services (2016)

On November 15, 2016, Samsung Canada acquired Rich Communications Services, a company developing new text messaging technologies.

Major Clients

Shell plc

Samsung Heavy Industries is a key provider of liquefied natural gas (LNG) storage facilities to Shell plc, a deal valued up to $50 billion over a 15-year period from 2009 to 2024. Notably, Samsung Heavy Industries constructed the topside facilities for Shell’s Sakhalin-II Lunskoye and Piltun Astokhskoye platforms. In 2012, Shell's plans to build the world's first floating LNG (FLNG) platform were realized at Samsung’s Geoje Island shipyard in South Korea, producing the largest ship by weight, at 600,000 tonnes.

United Arab Emirates Government

In 2009, a consortium of South Korean companies, including Samsung, Korea Electric Power Corporation, and Hyundai, secured a $40 billion contract to build nuclear power plants in the United Arab Emirates.

Ontario Government

Samsung, alongside Korea Electric Power Corporation, entered into a significant $6.6 billion renewable energy project with the government of Ontario, Canada. This deal involves developing 2,000 MW of new wind farms and 500 MW of solar capacity, and establishing a manufacturing supply chain in the province.

Corporate Image

Logos and Branding

• 1938: Samsung’s original logo.
  

• 1969-1979: Updated logo used during this period.
  
  
  

• 1979-1993: Logo used specifically for Samsung Electronics.
  
  
  

• 1993-present: Current logo used by Samsung across various segments, though still used by other Samsung companies.
  
  
  

• 2015-present: Current wordmark and corporate logo for Samsung Electronics, characterized by its blue color, symbolizing stability, reliability, and corporate social responsibility.
  
  
  

Audio Logo

Samsung’s audio logo, created by Musikvergnuegen and composed by Walter Werzowa, featured a sequence of notes: E♭, A♭, D♭, E♭. This audio logo was discontinued as of 2015.

Fonts

• Samsung Sharp Sans (2014): Unveiled as a new typeface.
• SamsungOne (2016): Designed for consistency across Samsung’s product portfolio, supporting 400 languages and over 25,000 characters.

Sponsorships

Samsung Electronics invested approximately $14 billion in advertising and marketing in 2013, a significant 5.4% of its annual revenue, making it one of the world's largest advertisers. Despite this expenditure, Samsung's global brand value was reported at $39.6 billion, less than half of Apple's valuation.

In Vietnam

Investment and Impact

In March 2008, Samsung began constructing its first mobile phone manufacturing plant in Vietnam with an initial investment of $670 million, which expanded to $2.5 billion. From 2018 to 2022, Samsung contributed over $306 billion in export revenue to Vietnam. In 2022 alone, the figure reached $65 billion, playing a crucial role in Vietnam’s export economy, which surpassed $732 billion. Samsung also significantly boosted local businesses, with the number of Vietnamese suppliers in its global supply chain increasing tenfold from 25 in 2014 to 257 by the end of 2022.

Controversies

Labor Abuses

Samsung faced several allegations of child labor in its supply chain between 2012 and 2015. In July 2014, Samsung terminated its contract with Shinyang Electronics following reports of child labor violations. A Samsung supplier in China, HEG, was also criticized by China Labor Watch for employing underage workers, though HEG denied these allegations. In 2020, Samsung was among the brands accused of being linked to forced Uyghur labor in Xinjiang.

Union-Busting

Samsung has faced criticism for its anti-union policies and union-busting activities globally. In May 2020, Samsung vice chairman Lee Jae-yong apologized for these actions. Additionally, Samsung was sued for allegedly stealing the corpse of a deceased worker.

2007 Slush Fund Scandal

In 2007, former Samsung legal head Kim Yong-chul revealed Lee Kun-hee’s slush fund, leading to a conviction and fine for Lee Kun-hee. He was later pardoned by the South Korean president in 2009.

Lee Kun-hee’s Prostitution Scandal

In 2016, investigative journal KCIJ-Newstapa released footage purportedly showing Lee Kun-hee engaging with prostitutes. The suspects involved were detained for blackmail, and while Lee’s culpability was speculated upon, no charges were pursued due to his health issues.

2017 Bribery Scandal

In February 2017, Lee Jae-yong was arrested for bribery and related offenses in connection with a merger approval. He was initially sentenced to five years in prison but had his sentence suspended and reduced. After a retrial, he served 10 months of a 2.5-year sentence before receiving a presidential pardon in August 2022.

Supporting Far-Right Groups

Investigations into the 2016 South Korean political scandal revealed that Samsung, along with other chaebols, funded pro-government demonstrations by conservative and far-right groups.

Price Fixing

Samsung faced fines for participating in a DRAM price-fixing cartel from 1998 to 2002, and additional fines and settlements in Canada for price-fixing of DRAM microchips. In Australia, Samsung was fined AU$14 million in 2022 for misleading water resistance claims on smartphones.