Samsung seeks to change: after the mobile phone is defeated in China, it wants to “make a comeback”

Can Samsung return to the center of the Chinese market?

After the mobile phone business has gradually faded out of the Chinese market, Samsung, which has become less and less concerned by public opinion, is now trying to return to the public view through an event.

Sina Technology learned from Samsung’s supply chain partners that Samsung Semiconductor and Samsung Storage are preparing for a series of activities to step out of the “haze” of the mobile phone business, further strengthen the brand influence in China, and start to accelerate the business layout in China.

After a five-year “cooling off period”, can Samsung return to the center of the Chinese market?

Put into production and meet

In the context of the global core shortage, mainstream chip manufacturers with core technical capabilities have become the beneficiaries of the “core shortage” crisis. However, in the opposite of Intel, Nvidia, TSMC and other companies’ new product releases, financing acquisitions, and expansion and construction of factories, Samsung Semiconductor, which ranks second in the world in annual revenue, has not appeared in the domestic media too much.

Today, the status quo that was once “lost” will be broken in the second half of this year.

According to relevant personnel of Samsung’s supply chain to Sina Technology, Samsung will carry out large-scale marketing activities in China in the second half of this year. Currently, it is closely consulting relevant industry professionals, hoping to further listen to the public’s suggestions on marketing and conference settings. The detailed issues cover government relations, cultural customs, marketing taboos, etc.

Domestic chip industry KOL Yang Guofeng also told Sina Technology that Samsung may be preparing to promote its own DDR5 products. “At present, Micron’s DDR5 products are already on the market, and Samsung may be a little anxious.”

In addition, Samsung Semiconductor is likely to work around the second phase of Xi’an plant that will soon be put into operation. Prior to this, Samsung’s $8 billion investment in the second phase of the Xi’an plant has been expanded, and it is expected to start full operation of all production lines in the middle of this year. At present, the factory has a monthly production capacity of about 130,000 pieces, plus the monthly production capacity of about 120,000 in the previous phase, which together accounts for about half of Samsung’s total NAND production capacity in 2020.

Previously, corporate executives including Intel and TSMC have predicted that the current global core shortage will continue until 2022. In this way, with the launch of Samsung’s factory, the promotion of various projects in the second half of the year will also become possible.

According to people familiar with the matter, Samsung is very cautious this time. It is currently soliciting suggestions from senior people from all walks of life. In the end, opinions from all parties will be consolidated for high-level reference. Some content will be sent to the South Korean headquarters, pending the headquarters’ decision.

Samsung seeks to change: after the mobile phone is defeated in China, it wants to "make a comeback"

Internal and external troubles

Since Samsung’s terminal business faded out of the mainstream Chinese market, the industry’s nerves can hardly be affected anymore. In the media, he bluntly said: “I don’t want to write about Samsung in the past two years because no one pays attention.”

According to data, in the first quarter of this year, Samsung’s mobile phone shipments in the Chinese market accounted for only 0.6%, which has fallen to the tenth place in sales. Prior to this, the market share of Samsung’s mobile phone in China was close to 30% at its peak.

It has become an indisputable fact that Samsung mobile phones lost to China. And behind this, why did Samsung mobile phones fail? It has become a topic of much discussion in the industry.

The matter should start from the summer of 2016. After the “Note7 explosion” incident, Samsung’s arrogant response in China became a key node in accelerating the loss of users of Samsung mobile phones in China.

Samsung seeks to change: after the mobile phone is defeated in China, it wants to "make a comeback"

At that time, there were frequent Note 7 explosions around the world, and Samsung also announced a global recall of Note 7 mobile phones that had been sold, but refused to recall mobile phones sold in China on the grounds that “the National Bank version of Note 7 uses different batteries.” Later, with the successive occurrence of domestic accidents, Samsung was forced to compromise under the pressure of public opinion. During the reversal, the company’s corporate image has been devastated. Many domestic users have reduced their brand favorability and began to switch from the Samsung mobile phone camp to other mobile phone brands. Samsung’s mobile phone market share has fallen sharply.

However, the explosion can only be regarded as an “internal worry”. The “foreign troubles” have intensified over the years, accelerating the decline of Samsung’s mobile phones in China.

In the Chinese market, a batch of domestic mobile phones represented by Hua, Mi, O, and V have ushered in a golden stage of rapid development.

Industry insiders told Sina Technology that between 2009 and 2013, Samsung’s mobile phones continued to occupy the top two positions in China’s smart phones by virtue of the advantage of low-end and mid-range all-you-can-eat. At that time, several major domestic mobile phone brands, including Huawei, were still living the days of charging their phone bills to send their phones. However, with the subsequent emergence of low-end price competition, the issue of multinational tariffs directly ruined the development prospects of Samsung’s low-end mobile phone market. “During this period, Apple mobile phones have always firmly occupied the high-end smartphone market, and Huawei is the representative in China. These factors have further squeezed the market share of Samsung’s mobile phones with the success of the high-end transformation of smart phone companies.”

Samsung seeks to change: after the mobile phone is defeated in China, it wants to "make a comeback"

Earlier, Professor Park Sang-eun of Seoul University in South Korea said in an interview with domestic media that “Chinese people are too patriotic and don’t want to use Samsung mobile phones.” But in fact, Samsung’s mobile phones are more of intensified competition due to the rise of local mobile phone brands, while Samsung failed to adjust the response in time due to the long organization and management chain of multinational companies, and eventually missed market opportunities step by step.

Missed opportunity and criticized

However, a lean camel is bigger than a horse. Although Samsung has declined in the domestic mobile phone business, it still has extensive international influence.

According to market research firm Gartner, Samsung Electronics ranks second in the ranking of semiconductor suppliers’ revenue in 2020, with a market share of 12.5% ​​in 2020, and the gap with Intel, the number one, is narrowing. However, in recent times, Samsung Electronics’ business progress in the global semiconductor field has not been smooth.

Since the beginning of this year, as the global core shortage has intensified, Intel announced in March that it would spend 20 billion U.S. dollars to build two wafer factories in Arizona, the United States, to enter the field of foundry. At the same time, TSMC also announced an investment of US$12 billion to start building a factory in Arizona, USA. During the period, news that Samsung was considering investing US$10 billion to build a factory in the United States also spread.

Today, Intel and TSMC have selected their factory sites, and TSMC has begun construction of factories, but Samsung is still hovering between the question of whether to build factories in the United States.

Some industry analysts said that in the foundry market, TSMC occupies more than 50% of the market share. In the case of insufficient market supply, TSMC’s rapid response to the layout can be understood. However, with Intel’s announcement to join the foundry industry, at the same time One step is to determine the establishment of a factory in the United States. Intensified competition will increase investment risks. If Samsung then ventures to follow the trend to build a factory in the United States, the risk of oversupply in the market may increase.

In the new round of competition to build a fab in the United States, Samsung has already been a step slower.

At the same time, Samsung’s history of poor performance in the field of chip foundry is also affecting the company’s expectations when its products go to the market.

Recently, some foreign media reported that Samsung’s self-developed 3nm process technology has been officially taped out, using GAA architecture, which has better performance than TSMC’s 3nm FinFET architecture. This means that the future mass production time node of Samsung’s 3nm process technology chip products is approaching, and subsequent large-scale commercial use will become possible. However, in the face of this good news for Samsung, while some people in the industry cheered, there are still many commentators who related this matter to the previous Samsung foundry Qualcomm Snapdragon 888 chip power consumption control, which further caused the power consumption of related electronic products. Seriously related to other issues, they criticized Samsung Electronics’ process technology for lagging behind TSMC, but it never lags behind in marketing momentum.

With the new round of “chip shortage” brought about by countries around the world to increase the awareness of chip independence, China, the United States, Japan, South Korea and other countries have introduced relevant industry support policies to support the development of their own chip companies. For Samsung Semiconductor, after missing the best time to set up a factory in the United States, perhaps adjusting its market strategy and re-examining the Chinese market has become a question it is currently thinking about.

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