Intel's Second Crisis Offers Lessons for Samsung

South Korea's stock market has recently shown a steep rise, with the KOSPI index surpassing 6,000. At the center of this rally are semiconductor companies including Samsung Electronics and SK hynix. However, just a year ago, Samsung Electronics faced a serious crisis. At that time, Intel, which had dominated the CPU semiconductor market, was also experiencing difficulties alongside Samsung Electronics, the leader in memory semiconductors. The two companies that had been competing for the top positions in the semiconductor industry were shaking simultaneously. This led to interpretations that the semiconductor industry had entered a transitional phase.

A year later, the situation has changed. Samsung Electronics emerged from the crisis relatively quickly, while Intel has yet to find a clear turning point. This difference can be explained by the different stages of crisis the two companies faced. Samsung Electronics was in its first crisis stage, whereas Intel had already gone through a crisis in the early 2000s and entered its second crisis stage. In this regard, Samsung Electronics' current crisis is similar to Intel's first crisis.

During the early 2000s crisis, Intel overcame difficulties based on its overwhelming production capacity and decades of accumulated process and design technology competitiveness. Intel then enjoyed a prolonged boom for more than 15 years until the early 2020s. This period of success was an opportunity for Intel to reorganize itself and prepare for the next leap. However, Intel failed to fully utilize that time. The technological gap that had given Intel an advantage over competitors during the first crisis gradually narrowed over time. Simultaneously, the center of gravity in the semiconductor industry rapidly shifted beyond the CPU market to artificial intelligence GPUs and smartphone semiconductors. The GPU market was led by Nvidia, while the smartphone market was dominated by the combination of ARM-based design and TSMC foundry.

Intel also attempted to enter the GPU and smartphone markets but failed to achieve results. In this process, Intel may not have been aggressive in entering new markets because it had the CPU as a "cash cow." Furthermore, the existence of a cash cow weakened the urgency of technology development, leading to slower development speeds compared to competitors. As a result, Intel fell behind TSMC in advanced process competitiveness and became a latecomer in the foundry business.

Ultimately, Intel faced a different situation in its second crisis, having missed the opportunity for a new leap. In the past, recovery was possible simply by reorganizing internal capabilities, but now Intel finds itself in a difficult position, having fallen behind in technology competition and being a latecomer in new markets.

The reason Samsung Electronics was able to escape its first crisis relatively quickly is similar to how Intel overcame its first crisis. It recognized the essence of the crisis, reorganized around core competencies, and made bold choices with focus. If Samsung Electronics takes Intel's second crisis as a lesson, we can expect a different future for Samsung Electronics than Intel's present.