The shining star in this regard is Samsung Electronics. The company's route to becoming the world's largest consumer electronics manufacturer mirrors the country's own journey in the past 50 years. While South Korea has risen rapidly from chronic poverty to its position as a major world economy, Samsung's path has seen it move from playing catch-up with developed-world rivals, to equaling and exceeding them, in terms of innovation and product design.
Samsung's focus on product development has been a key driver recently in the growth of its component business. Not only is the company highly vertically integrated, in terms of manufacturing hardware for its own products, it also has excelled as a leading producer of integrated circuits, LCD panels and memory chips for many of its competitors. Earlier this year, the technology giant reported its highest-ever quarterly operating profit from its semiconductor division, and offered a positive outlook for the year ahead.
As a memory-chip maker, Samsung is also riding high on what has been called a supercycle, with tight supply and increasing demand for more capability on devices such as servers and smartphones, driving up prices and profit margins. The industry is more consolidated than it has been in the past, with only three major DRAM players, and Samsung can continue to benefit from more rational market conditions. Meanwhile, another South Korean firm, SK Hynix, the world's second-largest memory-chip maker and fifth-largest semiconductor company, is also tapping into the growth of the memory market, and is set to respond to demand by mobilizing capacity in the information storage side of its operations.
For SK Hynix, as with Samsung Electronics, meeting this demand is already a profitable reality. Second-quarter operating profit this year rose a record-breaking 574% from a year earlier. The result beat the company's previous all-time high from the previous quarter, and it is now potentially on track for what could be its largest-ever annual operating profit.