Samsung: from dried fish to the world's most advanced chips
It started selling groceries and dried fish in a Korea wrecked by war. Today it builds the memory chips and screens that move the world. This is the story of how patience became an advantage.
In 1938, a young Korean named Lee Byung-chul opened a small trading shop in the city of Daegu. He sold groceries: rice, sugar, noodles and dried fish that he exported to nearby Manchuria. He gave it a name meaning 'three stars' in Korean: Samsung. Almost no one would have bet that this little food business would end up making the most advanced memory chips on the planet. But that is the story, and it is worth understanding.
An empire born from soup and sugar
Korea in the mid-twentieth century was not the prosperous country you know today. It was coming out of decades of Japanese occupation and, in the 1950s, a brutal war that left the south in ruins. In that setting, Samsung was not born as a tech company. It was born as a survival business: food, textiles, refined sugar, insurance. Things people needed every single day.
Lee's early lesson was simple but powerful: don't marry a single product, marry your organization's ability to make whatever it makes well. That conglomerate mindset, a company that does a bit of everything, is deeply Korean and goes by the name chaebol. Samsung became the biggest chaebol of them all.
The bet almost nobody understood
The big leap came in 1969, when Samsung entered electronics by making televisions and home appliances. But the move that changed everything was a different one. In the late seventies and early eighties, the company decided to manufacture semiconductors: the tiny chips that act as the brain and memory of any electronic device.
It was a huge and risky bet. Semiconductors demanded brutally expensive factories, know-how that Korea barely had, and years of losses before earning a single dollar. Plenty of executives thought it was madness. Japan and the United States ruled the market, and no one was waiting for a newcomer from southern Asia.
In a business where everyone watches the next quarter, winning sometimes comes down simply to being willing to wait ten years.
Why vertical integration became its secret weapon
Here is the part that matters most to any business owner. Samsung didn't just build the final product; it controlled the whole chain. If you make a phone, it pays to also make the screen, the memory, the processor and the battery. That is called vertical integration: keeping the key links of what you sell under your own roof.
The advantages of operating this way were clear, and they largely explain its dominance today:
- When components were scarce, Samsung supplied itself while competitors stood in line.
- Every dollar of chip profit went back into more modern factories, creating a circle hard to catch up to.
- It sold components even to its rivals, so it won money even when customers bought another brand.
- By controlling the quality of each part, it could ship complete products faster than anyone relying on outside suppliers.
By the 1990s, Samsung was the global leader in DRAM memory, the kind of chip your computer uses to work. Today, alongside a handful of companies worldwide, it makes the most advanced semiconductors in existence, plus the screens for millions of phones, including those of brands that compete with it head to head.
What a small business can learn from this
No, you are not going to build a multibillion-dollar chip plant. But Samsung's logic scales down beautifully. The company understood three things that don't depend on size: think in years rather than weeks, control what truly matters about your product or service, and reinvest profits into getting better instead of spending them.
If you sell a service, your equivalent of 'the chip factory' might be your reputation, your customer base or the quality of your care. Those things take years to build and are exactly what your competition can't copy overnight. Patience, well aimed, is one of the few advantages money alone can't buy.
From dried fish to the world's most advanced chips there is nearly a century of distance. What connects the two ends isn't luck: it's the discipline of taking good care of what you have today while you build what comes tomorrow.