"Samsung Electronics is the crown jewel of Korea Inc," said Jang Hasung, an economist at Seoul's Korea University. "But investors question its corporate governance. That's why its shares are so seriously devalued, compared to its US and even Taiwanese competitors, which are not doing nearly as well."
Samsung Electronics, the conglomerate's most globalized outfit, saw net profits halve to US$2.3 billion last year on revenues of US$24.8 billion.
Yet with US$538 million in profits from semiconductor sales, Samsung Electronics was the only major computer-memory chip maker to earn a profit last year.
Plunging chip prices pushed competitors like Micron Technology, Hynix and Infineon into the red.
Last year, the company lowered its dependence on lower-end computer memory, which has plummeted in price, focusing more on Rambus and DDR memory chips for newer, faster computers.
At the same time, Samsung Electronics' telecommunications division overtook the semiconductor arm in revenue, selling 29 million handsets worth US$5.4 billion.
"It was with cellphones that Samsung could finally cast off its consumer image as a mass producer of cheap goods," said Michael Min of Seoul's Korea Investment Trust Management & Securities.
Samsung now is a distant fourth in the cellular phone market dominated by Nokia and Motorola.
But its share is creeping up. The company makes some of the world's slimmest phones. Some feature video-capable color screens, others double as MP3 players.
In the US market, Samsung has provided Sprint PCS, the fourth-largest US wireless carrier, with 8 million phones since 1997. In January, it signed a new US$3 billion deal with Sprint to sell even more phones. The company is branching out into home networking, promising to unveil new products this fall -- in alliance with Microsoft -- that will merge computers, televisions and other digital home media.
It also began producing "Nexio" handheld computers that double as mobile phones.
James Chung, a spokesman for Samsung Electronics, puts it simply: "We want to lead the way in innovation."
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