The Fire That Wouldn't Stop
On the morning of September 2, 2016, Samsung Electronics announced a voluntary global recall of 2.5 million Galaxy Note 7 smartphones — every single unit it had shipped. The batteries were catching fire. Phones were smoldering on nightstands, melting through car consoles, forcing the evacuation of a Southwest Airlines flight. Within weeks, the Federal Aviation Administration banned the device from all U.S. flights. By October 11, Samsung had killed the Note 7 entirely, pulling it from shelves, halting production, and asking every customer on earth to power down and return their phone immediately. The write-off would eventually cost the company an estimated $5.3 billion.
But here is what makes the Note 7 catastrophe more than a product-safety story: in the quarter it happened, Samsung Electronics still posted an operating profit of roughly 5.2 trillion won. The division responsible for the Galaxy line hemorrhaged cash, yet the company as a whole barely stumbled, because the semiconductor division — specifically DRAM and NAND flash memory — was printing money at a pace that absorbed the entire smartphone disaster like a rounding error. The Note 7 was a reputational crisis. It was not, in any meaningful financial sense, an existential one. The architecture of Samsung had been engineered, across three generations of a single family, to survive precisely this kind of blow.
That architecture — vertically integrated, radically diversified, simultaneously the supplier and the competitor to nearly every technology company on earth — is the central paradox of Samsung. It is the world's largest manufacturer of memory chips and one of its largest smartphone brands. It builds the OLED panels that Apple uses in iPhones and sells its own phones against them. It fabricates processors for Qualcomm and designs its own Exynos chips to compete with them. It is the largest television manufacturer and the largest manufacturer of the display panels inside those televisions. Samsung is not so much a company as an industrial ecosystem contained within corporate walls, a thing so sprawling and self-referential that its closest analogy is not any Western technology firm but the South Korean economy itself — of which Samsung Group's revenues have historically represented roughly 15–20% of the nation's
GDP.
By the Numbers
The Samsung Empire
₩258.9TSamsung Electronics revenue, FY2024 (~$200B)
#1Global market share in DRAM memory
#1Global smartphone shipments (until ~2024)
#1Global TV shipments, 19 consecutive years
~267,800Samsung Electronics employees worldwide
5thMost valuable global brand (Interbrand 2024)
86Years since Samsung Group's founding in 1938
3Generations of Lee family leadership
The story of how a dried-fish exporter in Japanese-occupied Korea became the fifth most valuable brand on earth — ranking behind only Apple, Microsoft, Google, and Amazon in Interbrand's latest assessment — is not a story of one brilliant product or one visionary bet. It is a story of relentless, methodical vertical integration; of a family dynasty that treated each technology wave not as a disruption but as the next rung on a ladder built from components; of a corporate culture so disciplined that it could execute a "New Management" revolution from the top while suppressing organized labor from the bottom for more than half a century. It is a story, ultimately, about manufacturing as philosophy — the conviction that if you can make the thing, and then make the thing the thing goes into, and then sell the thing and the thing it goes into, you can survive anything.
Even, apparently, phones that catch fire.
Dried Fish, Sugar, and the Grammar of Korean Industry
Lee Byung-chul did not set out to build a technology empire. He set out, in March 1938, to trade dried fish, vegetables, and noodles from a small office in Daegu, in the southern reaches of the Korean peninsula, then still under Japanese colonial rule. The company he founded — Samsung Trading Co. — took its name from the Korean word for "three stars," a symbol he intended to convey bigness, power, and permanence. Lee was the youngest son of a wealthy landowning family, educated at Waseda University in Tokyo, where he had observed the Japanese zaibatsu — the vertically integrated industrial conglomerates like Mitsubishi, Mitsui, and Sumitomo — that would become the template for what Korea would later call the chaebol.
The biography of Lee Byung-chul is inseparable from the biography of South Korea. Born in 1910, the year Japan formally annexed Korea, he lived through colonial occupation, the devastation of the Korean War (which destroyed his original businesses), the authoritarian modernization drives of President Park Chung-hee in the 1960s and 1970s, and the country's improbable rise from one of the poorest nations on earth to an industrial powerhouse. Samsung rode every wave of that trajectory — and in many cases, was the wave. After the Korean War wiped out his trading operations, Lee rebuilt by moving into sugar refining and textiles. By the 1960s, Samsung was South Korea's largest company. By the 1970s, Lee had pushed into heavy industry, shipbuilding, and — critically — electronics.
The decision to enter electronics was neither spontaneous nor modest. In 1969, Samsung established Samsung Electronics Co., initially assembling black-and-white television sets using imported Japanese components. The entire operation was, at first, imitative — learning by doing, reverse-engineering, absorbing whatever technology could be imported or licensed. This was not a strategy unique to Samsung; it was the development model of South Korea itself, guided by Park Chung-hee's government, which directed credit, granted trade protections, and essentially co-authored corporate strategy with the chaebol in exchange for export growth. Samsung was among the most favored of these instruments of national development, and Lee Byung-chul was among the most willing to accept the government's industrial direction — and its implicit bargain that proximity to power was the cost of operating at scale.
The Semiconductor Gamble and the Logic of Vertical Integration
The pivotal moment — the decision that would ultimately make Samsung what it is today — came in 1983, when Lee Byung-chul announced Samsung's entry into semiconductor manufacturing. The move was, at the time, borderline irrational. Korea had no meaningful semiconductor industry. Samsung had no experience fabricating chips. The technology was controlled by American and Japanese firms — Intel, Texas Instruments, NEC, Toshiba — that had spent decades and billions of dollars building the process knowledge required to etch circuits onto silicon wafers. The idea that a Korean conglomerate known for sugar and textiles could compete in the most capital-intensive, precision-dependent manufacturing process in human history was, to put it mildly, not the consensus view.
Lee did it anyway. Samsung licensed 64-kilobit DRAM technology from Micron Technology in the United States and dispatched teams of Korean engineers to learn the process. The initial yields were dismal. The capital outlays were enormous. But Lee understood something about the semiconductor business that many of his competitors would learn too late: memory chips are a commodity, and in commodity businesses, the low-cost producer wins. The low-cost producer in semiconductors is the one who can afford to invest counter-cyclically — pouring capital into new fabrication capacity during downturns, when competitors are retrenching, so that when demand recovers, you are first to market with the cheapest, most advanced chips.
This counter-cyclical investment strategy would become the defining move in Samsung's playbook. It required two things that Samsung possessed in abundance: access to patient capital (through the cross-shareholding structures of the chaebol and, implicitly, through government-directed credit) and the institutional willingness to absorb years of losses in pursuit of long-term dominance. By the late 1980s, Samsung had closed the technology gap with the Japanese. By the early 1990s, it had surpassed them. In 1992, Samsung became the first company to mass-produce 64-megabit DRAM, leapfrogging NEC and Toshiba. By 1993, Samsung was the world's largest memory chip manufacturer — a position it has held, with brief interruptions, ever since.
Samsung's path from imitator to global DRAM leader
1983Lee Byung-chul announces entry into semiconductor manufacturing; licenses 64Kb DRAM technology from Micron.
1984Begins mass production of 64Kb DRAM chips, roughly four years behind Japanese leaders.
1988Closes the technology gap; develops 4Mb DRAM in parallel with leading Japanese firms.
1992First in the world to mass-produce 64Mb DRAM, overtaking NEC and Toshiba.
1993Becomes the world's largest memory semiconductor manufacturer by revenue.
2000sExtends dominance into NAND flash, becoming the largest supplier of flash memory globally.
The semiconductor business did more than generate profits. It gave Samsung a structural advantage that would ripple through every subsequent business it entered. When Samsung built televisions, it could source its own display-driver chips and memory. When it built phones, it could fabricate its own application processors, memory modules, and — eventually — OLED panels. The vertical integration was not merely about cost savings; it was about speed. Samsung could bring a new product to market faster than any competitor that had to negotiate with external suppliers, because Samsung was the supplier. The factory floor was the strategy.
The Second Lee and the Bonfire of Complacency
Lee Byung-chul died in 1987. His third son, Lee Kun-hee — passed over initially in favor of elder brothers who were deemed less capable — inherited the chairmanship of Samsung Group. If the founder built the chaebol, the second Lee remade it. Where Lee Byung-chul had been a methodical empire-builder, Lee Kun-hee was a disruptor of his own creation, a man possessed by the conviction that Samsung's success had bred the exact complacency that would destroy it.
The defining moment came in 1993. Lee Kun-hee had spent months traveling to electronics retailers in the United States and Europe, and what he found horrified him. Samsung products were buried on the lowest shelves, gathering dust, positioned as the cheap alternative to Sony, Panasonic, and Philips. The brand meant nothing. On June 7, 1993, in Frankfurt, Germany, Lee Kun-hee gathered Samsung's senior management and delivered what would become known as the "Frankfurt Declaration" — a speech so urgent, so scalding in its assessment of Samsung's mediocrity, that it ran to hundreds of pages when transcribed and was later published as a book.
Change everything except your wife and children.
The phrase became Samsung legend. Lee Kun-hee was demanding nothing less than a cultural revolution — a shift from quantity to quality, from low-cost imitation to premium innovation. He ordered Samsung's engineers to stop focusing on production volume and start focusing on defect rates. He restructured work schedules. He replaced senior executives. In one famous episode, he had employees gather $50 million worth of defective Samsung products — phones, fax machines, other electronics — in a pile outside a Samsung factory in Gumi, South Korea, and set them on fire. The bonfire was as much theater as it was quality control, a signal that the old Samsung was dead.
The "New Management" initiative that followed reshaped Samsung Electronics over the following decade. Samsung invested heavily in design, sending teams to study at the Art Center College of Design in Pasadena and Parsons School of Design in New York. It hired foreign designers and created an in-house design center, the Innovative Design Lab (IDS), that would become the nucleus of Samsung's transformation from commodity manufacturer to a brand that could compete with Sony on aesthetics and build quality. As the HBR case study "How Samsung Became a Design Powerhouse" documented, until the mid-1990s designers at Samsung had been relegated to "skinning" products — making engineering-driven devices look acceptable at the end of the development process. Lee Kun-hee inverted that hierarchy, demanding that design thinking be embedded at the beginning.
The results were not immediate. But by the early 2000s, the transformation was unmistakable. Samsung's flat-panel televisions began winning design awards. Its mobile phones — sleek, feature-rich, aggressively priced — gained market share in Europe and Asia. Revenue and margins climbed. And the brand, which Lee Kun-hee had found buried on the bottom shelf, began its ascent toward the premium tier that would eventually place it fifth in global brand value.
The Phone That Changed the Calculus
Samsung had been making mobile phones since 1988, but the phone business became the center of gravity for Samsung Electronics only after two tectonic shifts: the smartphone revolution catalyzed by Apple's iPhone in 2007, and Google's decision to open-source Android.
The iPhone was a crisis for every incumbent handset maker — Nokia, Motorola, Sony Ericsson, LG, and Samsung alike. But Samsung was uniquely positioned to respond, for a reason that had nothing to do with software brilliance and everything to do with the semiconductor investments Lee Byung-chul had made two decades earlier. Samsung could manufacture its own application processors (the Exynos line), its own DRAM and NAND flash memory, and — after acquiring and investing in OLED technology — its own display panels. When Apple designed the iPhone, it had to source its A-series chips from Samsung's foundry, its NAND flash from Samsung's memory division, and eventually its OLED screens from Samsung Display. The paradox was exquisite: Samsung was simultaneously Apple's most important supplier and its most dangerous competitor.
Android was the accelerant. Google's open-source mobile operating system, released in 2008, solved Samsung's single biggest problem: software. Samsung had never been a software company. Its attempts at proprietary mobile operating systems (bada, later Tizen) never achieved critical mass. But Android was free, open, and designed to run on any hardware — and Samsung's hardware was the best in the Android ecosystem. The Galaxy S series, launched in 2010, became the flagship Android phone by default, not because Samsung wrote better code than HTC or Motorola, but because Samsung's vertical integration gave it better screens, faster processors, more memory, and higher manufacturing scale than any Android rival.
By 2012, Samsung had become the world's largest smartphone manufacturer by shipments, surpassing Nokia. The Galaxy S III sold more than 50 million units. Samsung was spending an estimated $14 billion annually on marketing — an astonishing figure that dwarfed what any competitor except Apple was willing to spend — and much of that spend was directed at establishing the Galaxy brand as the anti-iPhone, the premium Android alternative for the hundreds of millions of consumers who wanted a flagship phone but didn't want to be locked into Apple's ecosystem.
It's not those finished products that are driving the majority of profits for Samsung. It's the components.
This observation — made by David Samra in a Colossus podcast episode devoted to Samsung's business structure — cuts to the heart of the Samsung paradox. The Galaxy phones were the public face of the company. They were what consumers associated with the Samsung brand. But the profit engine, the thing that made Samsung structurally different from every other smartphone maker, was the component business underneath. Samsung sold phones and sold the components inside its competitors' phones. It competed with Apple in the consumer market and supplied Apple in the component market. This dual position gave Samsung an information advantage (it could see demand trends across the entire industry through its supply contracts), a scale advantage (component volumes were additive across internal consumption and external sales), and a financial hedge (when phone sales slumped, component demand from competitors often rose).
The Chaebol's Shadow: Power, Prison, and the Price of Proximity
No account of Samsung can be honest without confronting the chaebol structure that made its rise possible — and the corruption that structure has repeatedly produced.
The Samsung Group is not a single company. It is a constellation of dozens of affiliates — Samsung Electronics, Samsung C&T, Samsung Life Insurance, Samsung Heavy Industries, Samsung SDI, Samsung SDS, and many others — linked by cross-shareholdings, shared management, and the gravitational pull of the Lee family, which controls the group with a remarkably small direct equity stake (the family's ownership of Samsung Electronics has historically been estimated at roughly 4–5% directly, amplified through a web of circular shareholdings among affiliates). This structure allows the family to exercise control far exceeding its economic interest — the classic chaebol dynamic that has shaped Korean corporate governance for decades.
The cost of this structure has been paid, repeatedly, in the courts. Lee Kun-hee was convicted of tax evasion in 2008 and given a suspended sentence. He was later pardoned by the president — a pattern so routine in Korean corporate justice that it has its own informal name: the "chaebol pardon." The pardon was granted, reportedly, so that Lee could serve on the committee bidding to bring the 2018 Winter Olympics to Pyeongchang.
But it was Lee Kun-hee's son, Lee Jae-yong — known in the West as Jay Y. Lee — whose legal troubles would expose the chaebol system's deepest pathology. In 2017, Lee Jae-yong was arrested and charged with bribery, embezzlement, hiding assets overseas, and perjury, in connection with a scandal that had already toppled South Korea's president, Park Geun-hye. The accusation: Samsung had paid 43.3 billion won (approximately $36–38 million) to foundations controlled by a close friend and confidante of President Park, in exchange for political support for a controversial merger between Samsung affiliates — a merger designed to consolidate Lee Jae-yong's control over the group as his father lay incapacitated after a 2014 heart attack.
Lee Jae-yong was convicted and sentenced to five years in prison in August 2017. On appeal, the sentence was halved and then suspended, and he was released in February 2018. He was re-tried, convicted again in January 2021, sentenced to two and a half years, and ultimately paroled in August 2021. He was officially pardoned in August 2022.
The cycle — arrest, conviction, appeal, pardon, return to power — is the cycle of Korean chaebol justice itself. Lee Jae-yong's case was, in the words of Korean media, the "trial of the century," and it carried within it a question that South Korea has never fully answered: Can a nation whose largest company accounts for roughly a fifth of its GDP actually hold that company's controlling family to account, when the economic consequences of doing so are themselves a form of national crisis?
Samsung Group continued to operate during Lee Jae-yong's legal travails. Samsung Electronics posted record profits in 2017. The company's operational management — distributed across professional executives running individual divisions — proved capable of functioning without the heir's daily involvement. But the longer-term strategic decisions — major acquisitions, capital allocation shifts, the direction of the foundry business — were widely understood to require Lee Jae-yong's imprimatur. His absence was not lethal. It was constraining.
The Component Empire and Its Discontents
To understand Samsung's financial architecture, you must understand that Samsung Electronics is really three companies dressed in a single corporate structure: a Device Solutions division (semiconductors — DRAM, NAND, foundry logic, display panels, image sensors), a Mobile eXperience division (smartphones, tablets, wearables), and a Visual Display and Digital Appliances division (televisions, refrigerators, washing machines, air conditioners). Of these, Device Solutions has historically generated the majority of operating profit — often 60% or more in good years — even when it accounts for a smaller share of total revenue.
The semiconductor business is cyclical in a way that can be violent. Memory chip prices are determined by supply and demand dynamics that swing between feast and famine, driven by the capital expenditure decisions of the three major DRAM producers (Samsung, SK Hynix, and Micron) and the inventory cycles of their customers. Samsung's strategy in memory has been consistent for four decades: invest counter-cyclically, expand capacity when competitors retrench, and use scale to drive down unit costs faster than the market price declines. This strategy works — until it doesn't. In 2023, the memory market experienced one of its sharpest downturns in years, and Samsung's semiconductor division posted an operating loss for multiple quarters. Then the AI boom arrived, and demand for high-bandwidth memory (HBM) chips — the specialized DRAM used to feed the insatiable appetite of AI training clusters built around Nvidia's GPUs — exploded.
Samsung should have been perfectly positioned for this moment. It was not. SK Hynix, Samsung's smaller Korean rival, moved faster and more aggressively into HBM production, securing early supply agreements with Nvidia and establishing itself as the preferred HBM supplier. Samsung's HBM chips reportedly failed Nvidia's qualification tests, delaying its entry into the highest-value segment of the memory market at precisely the moment that segment became the most important growth driver in all of semiconductors. The stumble was not fatal — Samsung remained the largest DRAM producer overall — but it was humbling. In a company whose foundational myth was being first to market with the next generation of memory technology, being second to SK Hynix in HBM was a strategic embarrassment.
The foundry business — Samsung's contract chip manufacturing operation, which competes with TSMC to fabricate logic chips designed by companies like Qualcomm, Nvidia, and Apple — has been an even more sobering story. Samsung has invested tens of billions of dollars in advanced foundry capacity, including a $17 billion fab under construction in Taylor, Texas. But TSMC's manufacturing yields at the leading edge (3nm, 2nm) have consistently outperformed Samsung's, and customer after customer has shifted production to TSMC. Apple, once a Samsung foundry customer, moved its A-series and M-series chips to TSMC years ago. Qualcomm, which had split production between Samsung and TSMC, has increasingly favored TSMC for its most advanced Snapdragon processors. Samsung's foundry division has reportedly operated at a loss or near breakeven for several years, a painful reality for a business that was supposed to be the growth engine of Device Solutions.
Samsung's foundry yields at the 3-nanometer node have lagged TSMC's by a meaningful margin, creating a self-reinforcing cycle: lower yields raise costs, higher costs drive customers to TSMC, and fewer customers reduce the volume needed to improve yields.
The Labor Compact Cracks
For more than five decades, Samsung Group maintained an ironclad no-union policy. It was one of the defining features of the chaebol's labor relations — and one of the most controversial. Samsung's founder, Lee Byung-chul, had been explicit about his opposition to labor organizing, and his successors maintained the stance with a thoroughness that extended, according to extensive reporting, to systematic surveillance of employees suspected of union activity. The no-union culture was not merely a policy preference; it was treated as a core management principle, part of the implicit compact that Samsung offered its workforce: high wages by Korean standards, lifetime employment expectations for many workers, and generous benefits — in exchange for absolute management discretion over working conditions.
That compact broke in 2024. In May of that year, the National Samsung Electronics Union — which had been formed in 2020, after Samsung finally acknowledged the legal right of its workers to organize in the wake of Lee Kun-hee's prosecution for labor-law violations — called the first strike in Samsung's 55-year history. The union, representing roughly 28,000 members (more than a fifth of Samsung Electronics' total workforce), initially called a one-day walkout using paid leave. When wage negotiations stalled — the union demanded a 6.5% pay raise and a bonus pegged to earnings — the action escalated into longer stoppages over the following months.
The strike did not halt production. Samsung's fabrication plants, where the highest-value semiconductors are made, are largely automated, and the company deployed non-union workers and management to maintain output. But the symbolic breach was enormous. The company that had defined itself by labor discipline, by the absence of adversarial industrial relations, now had workers marching outside its gates. The crack in the compact was a reminder that Samsung's culture — hierarchical, demanding, top-down — carried costs that had been suppressed rather than resolved.
The Design Reckoning
In late 2024, Samsung Electronics made an appointment that, in the context of its history, was almost as significant as its first semiconductor investment: it hired Mauro Porcini as its first-ever chief design officer. Porcini — Italian, flamboyant, prone to platform boots and plaid trousers in a corporate culture of muted formality — came from PepsiCo, where he had served as the first-ever CDO, and before that from 3M, where he had held the same distinction. His résumé was a catalog of firsts at companies that had belatedly recognized design as a strategic function rather than a cosmetic one.
The hiring was an admission. Samsung had long employed a vast internal design workforce — its Innovative Design Lab and Corporate Design Center had produced genuinely innovative products, from the curved-edge Galaxy phones to the Frame TV that disguises itself as a painting when not in use. But the competitive landscape had shifted. Apple's design coherence — the seamless integration of hardware, software, and services into a unified aesthetic experience — had become the benchmark that Samsung could match in hardware quality but never quite replicate in holistic brand identity. And from below, Chinese manufacturers like Xiaomi and TCL were encroaching on Samsung's premium positioning with devices that offered comparable specifications at lower prices, eroding the value proposition that Lee Kun-hee's "New Management" initiative had spent two decades building.
Porcini framed his mission in the language of human-centered design: "How can we evolve our portfolio to be as meaningful as possible to people and to the business? How can we create the best possible products? What is their identity? How do people interact with them?" The questions were simple. The answers would require Samsung to do something it had historically resisted: cede control from engineers and manufacturing-process experts to a design vision that prioritized emotional resonance over specification sheets. It was, in a sense, the Frankfurt Declaration all over again — a recognition that Samsung's strengths had become its limitations, that the manufacturing DNA which made it the world's most versatile technology company also made it, at times, the least distinctive.
The AI Pivot and the Question of Software
Every major technology company in the mid-2020s is narrating itself as an AI company. Samsung is no exception. The Galaxy S24, launched in January 2024, was marketed under the banner "Galaxy AI," with on-device features including real-time translation, generative editing for photos, and AI-powered search. The AI-powered Bespoke refrigerator, introduced around the same time, could recognize food items, track sell-by dates, and suggest recipes — a demonstration that Samsung intended to embed AI not just in phones but across its entire product ecosystem of televisions, appliances, and connected home devices.
But Samsung's AI ambitions expose the company's oldest weakness: software. Samsung has never been a software-first company. Its mobile software experience — the heavily customized One UI layer atop Android — is competent but rarely praised. Its smart-home platform, SmartThings, has struggled to achieve the seamless integration of Apple's HomeKit or the ecosystem dominance of Amazon's Alexa. Its AI models rely heavily on partnerships (with Google for on-device AI, with various cloud providers for server-side processing) rather than proprietary large language models of the kind being developed by Google, OpenAI, Meta, and others.
The question for Samsung in the AI era is whether vertical integration in hardware translates into competitive advantage in a world increasingly defined by software and data. Samsung can build the chips, the displays, the memory modules, and the devices — but can it build the intelligence that makes those devices indispensable? The history suggests caution. Samsung's bada operating system failed. Tizen survives only in televisions and wearables, not in the smartphone market where ecosystems generate their highest-value lock-in. Samsung Pay has decent adoption but has never threatened Apple Pay or Google Pay in scale or user attachment. The pattern is consistent: Samsung excels at the physical layer and struggles at the application layer.
This is not a new tension. It is the tension that has defined Samsung since Lee Kun-hee's Frankfurt Declaration — the gap between manufacturing excellence and brand experience, between making the best components and creating the most compelling product. The AI era raises the stakes of that gap, because AI capabilities are, by their nature, software capabilities, and the companies that define the AI user experience — Google, Apple, OpenAI — are not companies that Samsung can out-manufacture.
Three Stars, Three Generations, One Question
Lee Byung-chul built the chaebol. Lee Kun-hee transformed it. Lee Jae-yong — convicted, imprisoned, pardoned, restored — now leads it into an era defined by AI, geopolitical fragmentation of semiconductor supply chains, and the most intense competitive pressure Samsung has faced in a generation.
The competitive map has shifted in ways that would have been unrecognizable a decade ago. In smartphones, Apple likely overtook Samsung as the world's largest vendor by revenue in 2025 — the first time in over a decade — while Xiaomi, Oppo, and Vivo press from below. In memory, SK Hynix has seized the initiative in HBM, the highest-margin memory segment. In foundry, TSMC's lead has widened to the point where Samsung's massive investments in advanced nodes may never achieve the returns that justified them. In consumer electronics, Chinese manufacturers are relentlessly commoditizing categories — televisions, displays, appliances — where Samsung once commanded premium pricing.
Samsung's response has been characteristically multi-pronged: a $230 billion investment plan through 2042 announced for semiconductor manufacturing, the hiring of Porcini to reimagine product design, a push into agentic AI across its device ecosystem, and continued expansion of its Taylor, Texas fabrication plant. Whether these moves constitute a coherent strategy or a series of expensive hedges against an uncertain future is the question the next decade will answer.
The Lee family's control, maintained through the byzantine cross-shareholding structures of the chaebol, remains intact despite the legal dramas — reinforced, paradoxically, by each crisis. Lee Jae-yong's pardon in August 2022 was granted, as his father's pardon had been, with the implicit justification that Samsung was too important to Korea's economy for its leader to remain in prison. The company's relationship with the Korean state has not fundamentally changed since the 1960s; it has merely been renegotiated, generation by generation, scandal by scandal, pardon by pardon.
On a December morning in 2024, Mauro Porcini sat in his new office at Samsung's R&D center near Seoul's Gangnam district, wearing platform boots and a beige jacket with a red lapel, surrounded by the muted formality of a Korean chaebol that had just asked an Italian in plaid trousers to reimagine its soul. Behind him, somewhere in the building, engineers were working on the next generation of foldable phones, on OLED panels thinner than a human hair, on HBM chips designed to win back Nvidia's approval. Somewhere in Pyeongtaek, Samsung's largest fab complex — the size of a small city — was running around the clock, producing memory chips that would end up in data centers from Virginia to Singapore.
Three stars. Three generations. An empire built on the conviction that if you can make the thing, everything else follows. The question that remains — the question Lee Byung-chul never had to ask, that Lee Kun-hee answered with fire, that Lee Jae-yong must answer from the other side of a prison cell — is what happens when the thing that matters most is the one thing you cannot manufacture.
