Samsung accused of launching 'kill Taiwan campaign'

Apr 17 2013, 15:42 IST
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Taiwan's smartphone, memory chip and display panel makers have suffered sagging exports in recent times. Taiwan's smartphone, memory chip and display panel makers have suffered sagging exports in recent times.
SummaryTaiwanese companies have long viewed tech giant Samsung as a major threat.

Taiwanese companies have long viewed tech giant Samsung as a major threat and the battle has recently appeared to tilt in favor of the South Korean rival as Taiwan's smartphone, memory chip and display panel makers suffered sagging exports.

The sales erosion has been driven by competition, some of it from South Korea, and a weak global economy but has also spawned fears on this export-reliant island of 23 million that Samsung has deliberately targeted Taiwanese firms as part of a campaign to undermine their competitiveness in markets around the world.

Business Today, Taiwan's top business magazine, gave voice to those fears last month with an extensive cover story accusing Samsung Electronics of launching a "Kill Taiwan'' effort and targeting some of the island's leading high-tech companies including Taiwan Semiconductor Manufacturing Co., the world's largest contract chip maker.

Adding fuel to the fire, Taiwan's Fair Trade Commission recently launched an investigation into allegations that Samsung planted unflattering comments about Taiwanese consumer electronics on the Internet as a way of undermining their appeal to customers.

While Taiwanese companies are facing a challenge from Samsung, industry analysts such as John Brebeck, a Taipei-based adviser with technology development firm Quantum International Corp., says perceptions here that the South Korean company is setting out to crush Taiwan's lucrative technology industry miss the point.

Samsung is trying to make inroads in specific areas where it sees a big profit potential and these areas are also where Taiwanese companies have a major stake, he said. "It's not Taiwan as much as it's industry sectors that's motivating Samsung.''

Samsung Electronics spokeswoman Jee Hae-Ryoung said business strategies like "Kill Taiwan'' do not exist at Samsung.

That's all little comfort for Taiwan's technology industry, which knows it must remain nimble and innovative to avoid the downward spiral of famous Japanese companies such as Sony Corp. which were outrun by competitors including Samsung. Taiwan's high tech exports totaled $98 billion last year, accounting for about 20 percent of the island's GDP.

Fearing they will lose more ground, a number of Taiwanese manufacturers are carving out alliances with high-tech companies in Japan and the United States that are also facing off against Samsung, in an effort to safeguard market share and give a boost to Taiwan's economy. A noted and longtime Taiwanese collaborator is Apple Inc., which was replaced last year by Samsung as the top smartphone maker in the world.

For its part, the

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