In my point of view Samsung should not cooperate with Chinese firms.

Samsung should not collaborate with Chinese firms because in semiconductor industry Samsung is the
market leader. It has the expertise in the field. It manages cyclical ups and downs like no one else in the
industry. Its HR practices are unique and effective. Intellectual property of Samsung will not be safe if the
cooperate with Chinese firms. Chinese firms lack technology and expertise in the field. They rely on blue
prints of other manufacturers to produce chips.

How should chairman lee and senior management team at Samsung react to Chinese competition?

My opinion against collaborating with Chinese firms is based on evidence that makes Samsung class apart
from Chinese firms. Samsung is the market leader in the semiconductor industry and it is outperforming all
other rivals in the industry. On the other hand, Chinese firms are nowhere near to compete Samsung and
they don’t even have capabilities to design their chips. Samsung is in the industry from almost three decades
and it has all the skills required to dominate the industry.

Semiconductor industry has its cyclical ups and downs and Samsung is master of managing cyclical ups
capitalizing on these cyclical variations. Most of other firms usually struggle to time their capital
investments to take advantage of market developments.

One aspect that makes any company class apart from others is its human resource and Samsung’s HR
practices are very much contributing to give it human resource that perfectly fits in company’s reputation
as market leader. Samsung goes after talent irrespective of their background in terms of nationality, gender,
ethnicity or religion. Consistently performing managers were promoted to top tier of management. Samsung
invest heavily on its employees because they understand human resource can lead to further glories in the
industry.

Chinese firms lack expertise and technology that are required in memory industry to excel. Chinese firms
heavily rely on other countries and companies to license them their technologies. Governments of countries
like USA and Taiwan don’t allow their companies to transfer their cutting-edge technologies to China
because of rivalry existing among these countries. Chinese firms might go to some other countries to get
technology and assistance but without Samsung, American and Taiwanese companies It will be very
difficult for Chinese companies to compete with giant of the memory industry Samsung.

In case if Samsung collaborates with Chinese firms the greater threat it will face that its intellectual property
will not be safe. China doesn’t have any sound laws that protect intellectual property. Chinese companies
are going to steal Samsung’s technology and skills to enhance and build their capabilities and will
eventually throw Samsung out of industry.

Because of the reasons given and defended above I am very much confident that Samsung should not
collaborate with Chinese firms. Instead of thinking to collaborate with Chinese firms Samsung should focus
on investing in cutting edge technology like Nano. It should allocate huge amounts on R&D to become
trend setters in the industry.