In late October of 1991 the crew of the Andrea Gail, a sword fishing boat out of Massachusetts, faced the fight of their lives. Out at sea, they were confronted by three raging weather fronts, which unexpectedly collided to produce the greatest, fiercest storm in modern history -- what author Sebastian Junger titled "The Perfect Storm" in his book, later turned movie.

As the semiconductor industry continues its transition toward the consumer electronics and mobile markets, Samsung's Jon Kang warns that the memory segment is facing its own "perfect digital storm" where only the prepared will survive.

"I was bored one day and flipping through my old video file," the senior VP said, regarding the 2000 Warner Brothers film. "It was a bunch of [guys] going out on another fishing trip because they didn't make enough money the first time. So they go out, 100 percent unprepared, and get caught up in this once in a century storm."

In the film, a meteorologist describes how this perfect storm is formed, saying there's a cold front coming down from Canada, warm air lingering from the summer months from the Atlantic to feed the front, and hurricane residue left over from a recent storm.

"These three factors come together to come up with a perfect storm. It struck me that the analogy was to me the mobile front, the consumer front and the residual PC front being all stirred up together," Kang said.

Kang's main concern for the memory industry is that companies will continue to hold on to the PC segment for their majority of sales, despite the growth of other markets, as the Andrea Gail's crew did, despite the shortage of swordfish in its territories.

"I see these three factors converging together: the onset of the mobile and consumer era with a residual PC era. The PC is still important; I don't want to essentially disregard the importance of PCs. PCs are probably, for a lot of these companies, well over 50 percent of their business. For us, it's less so.

"The new growth area, for [Samsung] anyway, is mobile consumer. I don't know if the other people have caught on to it. Get off the PC bandwagon – it's over, it's been over for a few years now – and get on the mobile consumer bandwagon," Kang remarked in a conversation with Electronic News. 

Samsung began spreading this message at the 2002 ISSC conference, right on top of one of the worst memory markets in history.

"I think the PC market had a contraction – the first time ever in the PC industry," the VP noted. "DRAM prices plunged something like 90, 95 percent. And you had these companies recording billions of dollars in losses. There was just carnage in the DRAM world.

"Three years later, we are seeing a huge increase in applications and needs of memory in the mobile consumer era," Kang said, estimating half of Samsung's $18.8 billion in memory revenue came from mobile consumer products. "We're projecting that in two years that type of trend will occur in the entire industry."

The Samsung exec exampled three mobile CE devices to prove his point: The explosive MP3 player market, which Kang believes will move to an all flash format for lower capacity models with less than 5Gybtes of storage like the iPod shuffle; the digital camcorder market, which, as it continues to get lighter and smaller, is beginning to progress to semiconductor memory instead of hard tape; and the cell phone market, which cries out for more NAND-based memory as data applications like digital picture storage become just as important as voice applications.

"We have this perfect digital storm brewing with these factors and if you're not prepared, you are going to get sunk," Kang said, pointing to a diversified memory portfolio, the ability to provide total solutions and its CE end-product business as Samsung's lifejacket. "If you are prepared and willing to take on this challenge, you can go ahead and surf that."

By: DocMemory
Copyright © 2023 CST, Inc. All Rights Reserved