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Samsung operates on both low-cost and differentiation strategies. From the cost data given in the case, its low cost is mainly due to lower raw materials, R&D and labor cost. Lower raw material cost is achieved through producing multiple product architectures on each production line, with skilled engineers stationed to handle all kinds of contingencies. More importantly, Samsung is able to learn new design rules and apply it to their production. According to the case, Samsung currently uses the smallest process technology of 0.11µm which enables them to have a higher net dice per wafer compared to their peers who uses 0.13µm. This probably explains its leadership position in the industry in terms of yield rate.

In contrast to its competitors, Samsung has only a single main R&D facility in Seoul, South Korea. The collocation of R&D facility with its fab lines has allowed savings of up to 12% on fab construction cost for Samsung. Moreover, Samsung has placed R&D engineers with......

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Approximate Word Count: 408
Approximate Pages: 2 (250 words per double-spaced page)

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