Samsung Electronics establishes Stellus in the U.S. and develops semiconductors for Data Centers.
Samsung Electronics has finished preparation to enter enterprise storage system business and it has recently established professional subsidiary in San Jose for this reason. It can be seen that this is Samsung’s move in securing future growths through newly-established subsidiaries and M&A.
According to industry on the 15th, Samsung Electronics established ‘Stellus Technologies’ in San Jose in December of last year. It is an affiliate that has 100% of its shares owned by Samsung Electronics and has Senior Vice-President Dan Neault of Samsung Strategy Innovation Center (SSIC) as its first CEO. CEO Neault was responsible for enterprise server products in Microsoft and Netapp.
Stellus Technologies will be responsible for manufacturing and selling solid state storage for servers. Based on SSD (Solid State Drive) technical skills that Samsung Electronics possess as one of its strengths, it will focus on developing next-generation semiconductors for data centers and securing technologies.
It will also work to become an expert in this field by also being in charge of sales and maintenance. According to United States Patent and Trademark Office, Stellus has included information of this type of business and announced that it will participate in all fields that are related to enterprise storage system. It has also developed its own software (SW) to maintain server storing places and implied that it will become a comprehensive solution business from a business that sells only storage parts.
Establishment of Stellus was due to high possible growth in storage markets. Global storage market was valued at $8.8 billion according to an announcement of a market research company called IDC on second quarter of 2015 in September. Currently EMC, HP, Dell, IBM, and Netapp that have been accumulating technical skills since time of HDD (Hard Disk Drive) take up 70% of all markets.
Recently storage market is making a sudden change due to expansion of ‘All Flash Storage’ that is based on flash memory and EMC being bought out by Dell. Violin Memory, Solid Fire, and Pure Storage from All Flash industry had received NAND-Flash Memory from Samsung Electronics, Toshiba, and Micron, incorporated its own SW, and turned into ‘System Solution’. Dell bought EMC, which is the number 1 in this industry, for $67 billion in last October and has secured third of all markets.
It can be seen that establishment of Stellus is Samsung Electronics’ signal indicating that it is entering All Flash Storage markets. Samsung Electronics believes that there are breakthroughs in data centers while there are worries in future growth in memory semiconductor markets due to slow growth of Smartphone industry and reverse growth of PC industry. CEO Brian Krzanich of Intel stated during earnings announcement in last month that company’s future is in data centers.
Samsung Electronics had continuously announced its intention in going after enterprise products such as enterprise servers and others whenever there were opportunities. “Proportion of PC has fallen under 20% due to diversification of application areas of D-RAM.” said Executive Director Chun Sae-won of Samsung Electronics’ Memory Business Sector’s Strategy Marketing Team. “Although overall growth of set this year will be slower than 2015, situations of supply and demand in products for servers and mobiles per application area will be different.”
It is heard that management of Stellus will be kept private for awhile because Samsung Electronics has established Stellus as a ‘Stealth Business.” Stealth business is a business that does not go public on its sales, profit, and loss.”
On a separate note, Samsung Electronics has recently increased shares that it owns in ‘Future Technology and Service’, which is a business in Japan that specializes in semiconductor design, from 50% to 100% and has incorporated it as Samsung Electronics’ complete subsidiary.
“Samsung Electronics bought all of our shares after our other shareholder got rid of shares that it had owned.” said a representative for this business. “We are responsible for designing system semiconductors for System LSI Business Sector.”
Staff Reporter Seo, Hyeongseok | hsseo@etnews.com & Staff Reporter Han, Juyeop | powerusr@etnews.com