Portland International Engineering and Technology Management Center

Within the last ten years, Korea has demonstrated an unprecedented level of technological achievements. These include being:

To fully understand why Korea has achieved this level of technological development, a careful examination of the following is necessary: (a) its technological history, and (b) a case study of the creation of Korea’s largest company—Samsung’s—memory business. An examination of these two areas is particularly illuminating as it provides insight into how Korea’s colonial history—the pride, determination and hard work of its people—transformed an agriculturally based economy to one based on technology. In addition, this analysis may provide insight into Korea’s technological future.

To fully understand how Korea developed into a technologically sophisticated society, it is necessary to understand Korea’s history and its relationship with Japan. Korea was under Japanese colonial rule from 1910 to 1945 and consequently has developed an extremely nationalistic spirit especially in relationship to Japan. Its goals, therefore, were predicated less on catching the West but on surpassing Japan[1].

Korea’s technological development can be traced back to the 1960s when export-oriented large conglomerates were formed called chaebols and the subsequent establishment of their electronics business in the 1970s. Chaebols and electronics were strategically chosen based on the modeling of the Japanese war time economic creation model and because electronics was chosen as an area of focus by the Japanese, respectively.

Korea’s subsequent technological evolution has been characterized by its Ministry of Science and Technology[2] as having the following phases:

Korea’s technological developmental model could be characterized as the following: imitating Japan in industries and organization; leveraging technology from the West; investing significant capital; gradually transferring the technology internally; and improving and enhancing this technology. Throughout all of this three characteristics are evident: a fiercely nationalistic spirit, a penchant for hard work, and extraordinary determination. This model and these traits were never more evident than in the creation of Samsung’s memory business.

In February 1983, Samsung’s chairman made a famous statement that Samsung would become a world player in the memory business. In less than ten years Samsung had become the world’s number one producer of DRAM[3]. Less is known, however, about the sequence of events that led to this achievement, and an examination of this is insightful.

Samsung’s evolution as the dominant DRAM producer (see table below) closely parallels Korea’s technological evolution. DRAM was chosen as the industry of choice because of Japanese’s penetration in this market and its ability to be produced in large quantities. Initially, Samsung leveraged intellectual capital by recruiting experienced Korean scientists residing in the US and had them do the design work while based in the US. Similarly, technology was leveraged from the US firm Micron through collaboration and eventual technology transfer.

In 1985, a seminal event occurred in Samsung’s semiconductor, and arguably Korea’s technological, development. Samsung sent a group of Korean engineers to spend the summer learning from their Korean colleagues in the US. After returning from the US, the Korean trainees insisted they had the capability to develop the 1M DRAM also. They demanded to be given an opportunity to do so independent of the efforts of the Korean-American engineers in the US. Eventually, management agreed that even though it would double the cost, they would have both teams develop the 1M DRAM in parallel. Ten months after the project began the Korean engineers finished first!

This achievement astonished everyone because no one could understand how a group of amateurs could defeat a team of professionals who had dedicated their entire lives to developing memory chips. The Chairman of Samsung Electronics[4] at the time explained: “The team in the US had expert knowledge but could not sacrifice 24 hours a day for months at a time…like the team in Korea.” After the 1M DRAM race, both teams were again given the opportunity to develop the 4M DRAM, but this time an ultimatum was given to the US team that it would be their last chance. The Korean team won again! At the conclusion of the development of the 4M DRAM, Korea had closed the ten-year technological advantage of the West and Japan and was equal to them technologically. Since then Samsung has become the world’s leader in DRAM.

The case study of Samsung’s rise to become the world leader in DRAM also illustrates how Korea became a technological powerhouse. This was achieved through carefully duplicating Japanese technology; investing significant capital; leveraging technological and intellectual capital from the West; gradually transferring this technology internally; enhancing and improving this technology; and throughout all of this being driven by a fiercely nationalistic spirit which makes Koreans work harder than their competitors and through all obstacles.

This approach has limitations, however, as it is predicated on being a “follower,” thereby implicitly having someone to follow. In addition, the characteristics of the industries in which it is successful are those that are high volume, high turnover, very competitive, and have predictable technological evolution and existing process technology. The challenge facing Korea as it looks to the future is the same challenge Japan faced in the 1980s: how to make a transition from being a “follower” to now being a “leader” and in addition, how can it transition to industries that do not exhibit these characteristics? The ease with which Korea can make this transition will determine its technological future.

[1] This goal is present even today: during the 2002 World Cup Koreans celebrated more at placing higher than Japan than being the first Asian country to reach the semifinals.

[2] Ministry of Science of Technology, “Science and Technology in Korea: Past, Present and Future”

[3] Dynamic Random Access Memory

[4] Jin-ku Kang, “A Career in Korea”