After establishing Samsung Company and acquiring Chosun Brewery, the business flourished. However, Ho-Am felt that there were limitations to realizing his vision that business should have a purpose beyond pure financial success, and should significantly contribute to national and social development. The Korean economy at that time lacked capital and technology, and there was a severe shortage of power supply. In addition, there was no prospect of expanding material production in the short term. Keenly aware of this situation, Ho-Am judged that trade was the only path to prosperity and established his base in Seoul to begin international trade. He gathered people from various sectors of society and also convinced his executives who opposed such plans because of the high risks involved.
After a year and a half in Seoul, in November 1948, Ho-Am hung up the sign for ‘Samsung Moolsan Trading Company.’ The company initially exported squid and agar to Southeast Asia, including Hong Kong and Singapore, and imported cotton textiles, eventually expanding to other businesses.
Within a year and a half, Samsung Moolsan Trading Company had become the domestic leader among trading companies and enjoyed rapid success. However, Ho-Am lost everything with the outbreak of the Korean War on June 25, 1950. After liquidating all assets, Ho-Am returned to Daegu and visited Chosun Brewery. Despite the dire situation at the time due to the war, the employees of Chosun Brewery managed to amass and protect 300 million won from the company’s finances. Using this capital as a foundation, Ho-Am was able to begin rebuilding Samsung in Busan, and it highlighted a moment that underscored Ho-Am’s keen eye for talent. On January 11, 1951, he newly established Samsung Moolsan.
Following the success of Samsung Company, Ho-Am acquired Chosun Brewery in 1939. At the time, the brewing industry was one of the businesses with very high growth potential and Chosun Brewery produced soju, raw and refined rice wine, as well as cider. However, soon after the Korean War broke out, Samsung Moolsan Trading Company was in a difficult position after its warehouses that stored imported goods were looted. Despite these challenges, Chosun Brewery’s business boomed, making a lot of money, in part thanks to the surge in refugees moving into Daegu.
However, as the frontlines kept moving south, even Daegu was no longer safe. In a desperate attempt to protect the company’s capital, employees of Chosun Brewery loaded two wooden boxes of cash containing 300 million won in to a car, disguising the cash as a bundle of documents. Their goal was to transport the funds to a wholesaler in Busan, but the car and its driver went missing in the chaos before arriving in Busan. Surprisingly, as the employees had already given up hope on finding the driver, the driver returned about a month later. He revealed that he was forced into military conscription and had to hide the boxes of cash in a rice mill on the street of Yeong-cheon that was located halfway to Busan. When the employees and the driver rushed to the rice mill, they found it was already burnt down in a fire. But to their surprise, the wooden boxes remained intact among the heaps of ash and the money remained untouched. Ho-Am, who lost nearly everything during the war, was able to use this recovered fortune to establish Samsung Moolsan in Busan and pave the way for the next chapter in Samsung’s history.
Ho-Am believed that, given Korea’s lack of resources other than human resources, importing raw materials for processing and then exporting products was the only viable path for economic development. He deemed manufacturing indispensable for this purpose, as it involves technology and processing capabilities, as well as production facilities. Despite opposition that the timing was premature, he made the final decision to invest in manufacturing and began researching potential sectors. After analyzing and reviewing the options among paper manufacturing, pharmaceuticals, and sugar refining, Ho-Am decided to start a sugar refining business.
With the support and cooperation of local authorities, Ho-Am established Cheil Sugar, which was Korea’s first sugar refinery after liberation. However, a challenge arose: due to anti-Japan policies, Japanese technicians who had the expertise in building a sugar refining plant could not enter Korea. So, Ho-Am set out to prove that Korea's engineers could solve the plant assembly challenge on their own. Factory manager Kim Jae-Myong demonstrated unwavering confidence that the plant could be completed with domestic talent alone.
Despite immense difficulties, the factory was completed two months ahead of schedule. On November 5, 1953, some 6,300kg of trial goods was produced. Ho-Am designated this day as Cheil Sugar’s founding anniversary. In 1953, Korea’s rate of dependency on refined sugar imports was 100%, but the rate fell to a mere 7% by 1956. Ho-Am was able to fully realize his goal of replacing imports with domestic production in 1958, when the rate reached 100%.
Ho-Am did not rest on the success of Cheil Sugar, and he turned his attention to developing the woolen textile industry as a way to contribute to the newly born nation. However, the business community gave a cold shoulder to Ho-Am’s plans. Competing with Britain’s 400-year-old woolen textile tradition itself was considered foolish and mocked at.
Undeterred by the opposition, Ho-Am decided to execute his ambitious plan to establish one of the finest production facilities in the world. He requested Mr. Kohei Hayashi, a technical director who retired from Tohoku Textiles in Japan, to develop a master plan, and applied to the government for a construction permit to build a woolen fabric production plant based on this plan. The government approved the permit on the condition that he acquire and introduce machinery from Spinnbau, a company in West Germany, which had already been ordered. Ho-Am decided to proceed with acquiring the Spinnbau machinery in accordance with the government's wishes. Spinnbau said it would require 60 German technicians for the plant construction, which would take a year to build. But with sufficient domestic experience already under his belt, Ho-Am felt that it would be possible to use only domestic technology for assembly and construction of the plant, and requested that only four German technicians be dispatched to help with the various production processes. Ultimately, Spinnbau agreed to Ho-Am’s proposal on the condition that it would not be held responsible even if the manufactured products did not meet the required specifications.
Through the united efforts of all involved, the carding plant was completed in December 1955 in just six months, half a year ahead of schedule. On May 2, 1956, after final inspections of each section of the plant, trial operations commenced. Although there were some shortcomings in the quality of the first products produced, Ho-Am was determined to continue developing and optimizing them until they could be comparable to the British products. Initially, due to the deeply imbedded mistrust of Korean products, demand did not materialize despite the lower price. But over time, the quality improved and the company steadily built a solid reputation. On October 26, 1957, Korean President Syngman Rhee visited the Cheil Wool Textile Industrial’s production plant, and praised it as a truly patriotic endeavor, writing in calligraphy ‘uipi-changsaeng,’ or ‘clothing as a new means to make a living.’
After the success of Cheil Sugar and Cheil Wool Textile Industrial, Ho-Am envisioned an even larger project that would be more beneficial to the national economy. He decided to build a fertilizer plant, recognizing it as a key industry for the country. In the late 1950s, Korea was spending 40% of its foreign aid funds on fertilizer imports.
"As someone born in the countryside, I have seen since childhood the struggles of farmers due to fertilizer shortages. A fertilizer plant is essential for improving agricultural productivity. Moreover, achieving fertilizer self-sufficiency will save a significant amount of foreign currency. The fertilizer plant must be built." (Autobiography of Ho-Am, p.227)
Ho-Am aimed to construct a world-class fertilizer plant with export competitiveness. After three attempts, he established Korea Fertilizer Co. in August 1964. The plant set three major records in factory construction globally: largest scale, most advanced facilities, and shortest construction period. Completed in just 13 months, Korea Fertilizer realized the national aspiration of self-sufficiency in fertilizers. Furthermore, it achieved $1.64 million in fertilizer exports, transforming Korea overnight from a fertilizer importer to an exporter.
In the late 1960s, Ho-Am turned his sights to the rapidly growing electronics industry around the world. After extensive research and analysis, he determined that the industry, with its emphasis on technology, labor, added value, and prospective domestic and international markets, was the most ideal for Korea’s economic growth.
After actively advocating for the industry’s future potential to the government, he established Samsung Electronics on January 13, 1969.
By 1978, only nine years after its founding, the company had produced a total of 4 million units of black-and-white televisions, and in May 1981, it surpassed 10 million units. Also in March 1984, color television production had reached a cumulative 5 million units, achieving the 10 million mark in August 1986. In 1979, the company also became the fourth in the world, after Japan, Germany and the Netherlands, to develop its own VTR technology. In the 1980s, Samsung Electronics shifted its focus to industrial products such as semiconductors and computers. Through continued technological innovation and productivity improvements, Samsung Electronics rapidly became the domestic leader and then forged its way into its current position as a truly global enterprise.
Having established a solid foothold in the electronics industry, Ho-Am boldly ventured into the field of heavy industries and chemicals.
The initial efforts were in shipbuilding. In May 1973, Ho-Am approached Chairman Taguchi of Japan’s IHI(Ishikawajima-Harima Heavy Industries) to negotiate a joint venture and sought to secure land in Anjeong-ri, Tongyeong County, South Gyeongsang Province. Even though the first oil crisis at the end of 1973 forced a change in plans for acquiring funding, Ho-Am continued to push forward with the effort. In May 1974, he received approval to set up a joint venture with IHI and in August of that year, Samsung Heavy was established with Samsung owning 75% and IHI owning 25%. However, due to the impact of the oil crisis, the global shipbuilding industry saw almost no new orders and even existing contracts were canceled. Ho-Am not only had the courage to start a business but also the wisdom to step back when necessary. He understood when to back away and delayed the construction of the shipyard by two to three years.
Later, the government and banks hoped Samsung would acquire a struggling medium-sized shipyard affected by the oil crisis. In response to the government's request, Ho-Am decided to acquire the shipyard in April 1977. This became what is now Samsung Heavy Industries' Geoje Shipyard. In December 1979, Samsung completed the first dock and adopted advanced shipbuilding technology from abroad to secure an annual production capacity of 150,000 gross tons. In February 1983, a second dock twice the size of the first was completed, and by 1986 the company had a total annual shipbuilding capacity to 450,000 gross tons.
In addition, Ho-Am sequentially expanded into petrochemicals (July 1974), construction and plant engineering (February 1977), and aviation (August 1977), restructuring its business focus from light industry to electronics, heavy industries and chemicals, and construction.
At the age of 73, in the twilight of his life, Ho-Am felt that it was an important time to make another bold move for the long-term prosperity of the nation. And despite facing difficulties and opposition, he decided to enter the semiconductor business.
Ho-Am thoroughly reviewed the opinions of numerous experts and related materials, striving tirelessly to obtain the best resources and knowledge about semiconductors and computers. In October 1982, he organized a semiconductor and computer business team, and on March 15, 1983, formally announced his decision to invest in the VLSI (Very Large Scale Integration) business. This decision was made after a full year of thorough research, study and review.
The technology was adopted from Micron’s 64Kb DRAM as well as Sharp’s CMOS process technology and 16Kb SRAM. Through cooperation from both the government and private sectors, groundbreaking for the VLSI production facility began on September 12, 1983, and it was completed in only eight months and 18 days in March 1984. Finally on May 17, 1984, the Samsung Semiconductor and Telecommunications VLSI plant in Giheung was completed. Korea became only the third country in the world after the U.S. and Japan to produce advanced semiconductors.
In only four months, Samsung reached a 51% production yield rate, the threshold for a successful 64Kb DRAM, and in just half a year, the rate was over 75%, rivalling that of Japanese competitors. The products also successfully passed highly rigid standards of U.S. computer makers and the company began its first exports of domestically produced semiconductors in September 1984. In October of that year, the company successfully developed its own 256Kb DRAM, and in March 1985, a second production line in Giheung mainly for 256Kb DRAM was completed.
Ho-Am was acutely aware of the fact that if he failed in the electronics industry, Korea would not break away from the ranks of underdeveloped nations, so he continued to steadfastly strive for success in the field of semiconductors, realizing that both Samsung’s and the nation’s industrial fate would be dependent on its success. The results were a testament to Ho-Am's foresight and determination.
