Outspending rivals sees Samsung pass $145b value mark

Samsung Electronics, Asia's largest maker of chips and mobile phones, topped US$100 billion ($145.73 billion) in market value this week, joining Vodafone Group as the only technology stocks outside the US to pass the milestone.

Shares of Samsung climbed as much as 3.8 per cent to 690,000 won, pushing the total value of the Suwon, South Korea-based company's common stock to 101.6 trillion won, or US$102 billion.

This decade, Samsung's market capitalisation has overtaken those of companies such as Finland's Nokia, Motorola of the US, and Japan's Sony.

Chairman Lee Kun Hee, whose father founded Samsung in 1969 as a maker of black-and-white televisions, is reaping the rewards of a strategy that created the world's largest maker of computer memory chips, TVs and six other electronic products by outspending rivals on research and factories.

Samsung is now aiming to double sales and become the world's No. 1 maker of 20 products by the end of the decade.

"Samsung continues to operate on a scale that few in the world can match, so I can't picture many companies trying to replicate it," said Brad Aham, who manages the $1.4 billion SSgA Emerging Markets Fund at State Street Global Advisors in Boston.

"Its challenge now is to identify the areas that will allow them to grow earnings off the already high base they've reached."

Samsung shares rose 46 per cent in 2005, capping the fourth annual gain in five years. Since the beginning of the decade, the stock had more than doubled, compared with a 34 per cent gain in South Korea's Kospi index and a 3 per cent drop in Morgan Stanley Capital International Inc.'s Asia-Pacific Index.

General Electric is the world's most valuable company at US$374 billion. Newbury, England-based Vodafone is valued at US$137 billion.

China Mobile (Hong Kong), the world's largest mobile phone operator by users, is the second-largest Asian tech stock at US$95 billion.

In the eight years since Samsung exported its first cellphone, it leapfrogged Ericsson and Siemens to become the world's No. 3 handset maker behind Nokia and Motorola.

Ericsson, which in 2000 was the No. 3 handset maker, teamed up with Sony a year later and their venture currently ranks fifth.

Siemens sold its mobile phone business to Taiwan's Benq Corp. last September.

Espoo-based Nokia, whose market value approached US$300 billion in 2000, is now worth less than Samsung at US$83 billion. Failure to match Samsung's clamshell designs and camera-equipped handsets contributed to Nokia's market share drop to the lowest level in five years during the first quarter of 2004.

Motorola saw its market value fall below Samsung's in December 2001. Motorola, which lost the industry lead to Nokia in 1998, is now worth $58 billion.

Sony, which boasted a market capitalisation of $107 billion in 2000, is now valued at less than half of Samsung.

The company that invented the Walkman trails Apple Computer in portable music player sales and now sells fewer TVs than Samsung, according to researcher DisplaySearch.

- BLOOMBERG