Econ 4450 (2010) Note 18 - support of the chaebuls...

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Econ 4450 Note 18
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Case 10 DRAMs and ASICs We continue to discuss Korea industrial policy in the period after President Park’ assassination. On the one hand, the government no longer pursues micro- management, like Park’s deployment of Daewoo to take over the failed automobile production from Shinjin Industrial, or his personal direction of Hyundai into shipbuilding against the will of Chung Ju yung (See Wan, 2004, Ch. 7). [The Big Deal of Kim Dae-Jung was a plan to re-organize the industries after the Financial Crisis of 1997-8, and not for industrial growth.]
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On the other hand, Korea did not give up industrial policy, as the chaebuls were supported in the development of the high tech sector. Last time, with the assigned reading by Kim and Lee, we focused on how Korean firms succeeded on cell phone. We now study the Korean success in the production of DRAMs in the assigned paper by Daniel Jung, where government financial
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Unformatted text preview: support of the chaebuls constitutes a necessary condition. But the competition between American and Japanese firms provided the opportunity for Samsung to outcompete all its rivals. It must be said that the efforts of LG and Hyundai were less successful. DRAMs is one of the three major types of semiconductors. The other two are CPUs and ASICs. Intel is the leader in CPU production, after it was forced by its Japanese rivals to exit from the market of DRAMs it invented. ASICs production currently is divided between the fabless chip designers on one side and the foundries on the other. The American firms are the main players in chip design, and the Taiwanese firms are the second, but the pure-play foundries is a sector dominated by the Taiwanese. Here Jungs analysis is not quite complete....
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This note was uploaded on 04/29/2010 for the course ECON 4450 taught by Professor Wan during the Spring '09 term at Cornell University (Engineering School).

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Econ 4450 (2010) Note 18 - support of the chaebuls...

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