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The Story of Samsung

A quick history of Samsung, Korea’s technology-focused behemoth.

Ben Kageyama Follow

Aug 6 · 4 min read

Samsung’s Lee Byung-Chul (1950), Public Domain via Wikimedia Commons
Despite the hardships brought by the pandemic, Samsung had sales totaling over 210
billion dollars in 2020. Net income after accounting for all expenses? A whopping $23
billion.

It’s no wonder that the closest thing Apple has to a competitor in the smartphone market
is Samsung in my part of the world. But even if they aren’t the market leader in
smartphones, this massive Korean-based company holds strong in many other electronic
markets — air-conditioning, kitchen appliances, and life-wear accessories, to name a
few.

Given how it has captivated the world, I think it’s worthwhile revisiting the company’s
humble roots. It’s hard to imagine that it was also once a diamond in the rough.

Humble beginnings

Seoul in the 1950s, Public Domain via Wikimedia Commons

Following the end of the Korean War in 1953, South Korea was still a developing
country trying to recover from the division of territory and the scars of military conflict.
Against all odds, this recovery gave rise to a period known as the “Miracle on the Han
River,” similar to the “Miracle of Rhine”, which described West Germany’s economic
rebirth after World War II.

One of the key companies that contributed to South Korea’s rise to industrialization and
economic stability was Samsung. Translated from Korean, “Samsung” means “three
stars” — an auspicious name, as stars were considered a symbol of something enduring.

The company’s roots go back to 1938, when Japan still ruled and occupied Korea. Lee
Byung-Chul came from a landowning family and moved to Daegu City, where he
founded the Mitsubishi Trading Company — also known as Samsung Samhoe. The
company started with only 40 employees and traded primarily in local groceries,
noodles, and dried fish. It eventually became so prosperous that its main office was
transferred to Seoul.

After World War II, Samsung began to diversify into other lines of business, such as retail
and insurance. Lee Byugn-Chul entered a joint venture with Cho Hong-Jai in 1947 —
the Samsung Trading Corporation. However, this soon ended because of conflicting
management styles. As a result, Samsung Group separated into Samsung Group and
Cho’s Hyosung Group, which still operates today.

Venture into electronics

Samsung’s first personal computer (1982), Public Domain via Wikimedia Commons
Samsung entered into electronics in the late 1960s, creating divisions such as Samsung
Electronics Devices and Samsung Semiconductor & Telecommunications. Their first
factory was based in Suwon, while the first electronic product they offered was a black-
and-white television.

In the 1980s, Samsung started manufacturing telecommunications hardware. The

company grouped these facilities under Samsung Electronics. When Lee died in 1987,
his son Lee Kun-Hee became the second chairman of the company. Samsung Group
Wass then separated into five different groups: Samsung, CJ Group, Hansol Group,
JooAng Group, and Shinsegae Group. Each group specialized in its different industries,
and Samsung kept its foot firmly in electronics.

People credit Lee Kun-Hee for the company’s heavy push into research and development.
He was aggressive about becoming an international brand, ordering radical reforms that
rejected traditional management.

In Samsung, he insisted that subordinates learn to become comfortable with pointing

out mistakes. He also imposed rigid quality standards. Under his leadership, Samsung
was also one of the few Korean companies that promoted women to senior executive
positions.

This leadership reform helped Samsung rise to International prominence in the 1990s,
eventually becoming the world’s largest producer of memory chips in 1992. Samsung
was able to weather the 1997 Asian financial crisis at the cost of selling Samsung Motor
and Renault at a massive loss. Samsung even expanded into manufacturing gas turbines
and aircraft engines, with Samsung Aerospace merging with Daewoo Heavy Industries
and Hyundai Space to become Korea Aerospace Industries.

Samsung today
 Samsung HQ, by Oskar Alexanderson, CC BY-SA 2.0 via Wikimedia Commons

Today, Samsung remains a force to be reckoned with. It has been granted more US
patents than any other company in the world. In 2020, it had the eighth highest global
brand value. With revenue equal to 17% of South Korea’s GDP and with its affiliate
companies making a fifth of the country’s total exports, it is synonymous with South
Korea and one of the greatest influences on its economy.

Samsung’s story remains an example for many other companies to follow — if you want
to achieve global greatness, you need to make radical changes and learn when to
expand.

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