June 01, 1999 in Social Responsibility News

SAMSUNG Electronics Sells Surplus Semiconductor Production Equipment Online

SEOUL, South Korea - June 1, 1999 - Samsung Electronics Co., Ltd., the world's largest DRAM maker, has adopted e-commerce as a means of reselling semiconductor production equipment standing idle. This innovative approach has been enthusiastically embraced by the industry.

The shrinking life cycle of semiconductor products has brought the average life span of semiconductor production equipment down to an average of five years or less. Therefore, Samsung is using the online sales system as an effective way to dispose of the accelerated accumulation of surplus production equipment.

To solve the dilemma, Samsung decided to open a dedicated website (http://www.intl.samsungsemi.com/surplus) last December, and has been generating monthly sales of US$336-420 thousand worth of equipment through the site each month since then. Company officials expect the site to generate sales of US$3.4 million in sales this year.

Samsung has garnered over 300 new buyers of semiconductor equipment from around the world since opening the website. The volume of equipment orders is said to be rising because of buyers' confidence in the quality of Samsung-approved equipment.

Most importantly, all the revenue generated from the sale can then be invested into buying new equipment, which in turn will increase the overall return on new facilities investments. Samsung's user-friendly website allows potential buyers to view both configurations and pictures of the equipment for sale. Site visitors can easily search for the kind of equipment they are interested in, and the purchase contract can be concluded by e-mail.

According to Vice President Joong-yong Lee of the Procurement Team at Samsung Electronics, "Adopting the online sales system has allowed us to sell directly to semiconductor companies around the world. The number of inquiries by dealers specializing in semiconductor equipment has increased consistently. So we have turned this into a win-win situatiokn: Samsung has enjoyed investment recovery by disposing of idle equipment and the equipment is utilized by other manufacturers."

Samsung Electronics Co., Ltd., with 1998 sales revenue of US$16.6 billion, is a world leader in the electronics industry. The Korea-based firm has operations in more than 50 countries with 60,000 employees worldwide. The company consists of three main business units: Multimedia & Home Appliances, Semiconductors and Information & Telecommunications. For more information, please visit our website, http://www.samsungelectronics.com

US$1 = KW1,191


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