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New Californian outpost will coordinate Samsung's efforts in the lucrative U.S. device market

The U.S. remains the most lucrative device market in the world.  And that market has been kind to Samsung Electronics Comp., Ltd. (KSC:005930) in recent years.

The South Korean electronics giant is perhaps best known for its best-selling Galaxy line of Android smartphones.  Last year it passed Nokia Oyj. (HEX:NOK1V) to become the world's largest phonemaker.  This year it hopes to sell 390 million smartphones alone.  No company has ever sold that many phones in one year, let alone a high-profit item such as smartphones.

I. New U.S. Headquarters Looks to Lure Employees Away From Apple

Samsung is looking to ride the wave of its boom with an aggressive expansion of outposts in California.  Young Sohn, Samsung's chief of strategy views expansion of engineering, design, and marketing in the west-coast state as crucial for Samsung's efforts to win the war against its arch-rival Apple.

Currently Samsung's semiconductor engineering headquarters is in California, along with a small research lab and a venture capital office -- all in San Jose.  But Samsung is now building a string of new facilities.

Samsung's Young Sohn
Samsung's CSO, Young Sohn

There will be an incubator base in Palo Alto, close to Stanford University.  An innovation center is headed to Menlo Park.  And a research and development facility is being built at the central San Jose location.  But the biggest project yet is a $300M USD San Jose campus upgrade for the semiconductor facility, which will serve as the new focal point for Samsung's vital North American efforts.

By building the new facility, Samsung hopes to lure top engineering, design, and marketing talent away from top rival Apple, Inc. (AAPL).  In an interview with the LA Times, Mr. Sohn comments, "This is the epicenter of disruptive forces.  And I want to make sure we're part of those disruptions."

Mr. Sohn is practicing the sermon himself.  He's relocated from his home country to San Jose, Calif., and is as close to possible to the new development.

II. The "Greenest" Tech Campus?

Just 15 minutes down the road from San Jose is Cupertino, home to Apple's headquarters.  Imbibed with billions of spare cash from years of record profits, Apple is looking to build a wild new headquarters, a ring shaped building that's been described as looking like a spaceship.  One of the final visions of dying Apple co-founder Steven P. Jobs, the building is set to be complete in 2016 and will house 12,000 employees.

But Samsung's new semiconductor headquarters may outdo Apple's flashy new base.  

Samsung Tower -- night
The new $300M USD campus will be an eye-catching landmark.

The Samsung project involves two six-story towers, currently under construction.  They will be composed of alternating layers of larger and smaller floors to give a ridged appearance to the building. Both towers will eventually be expanded to be 10 floors high.

Samsung tower stack
Designed by NBBJ, the towers will eventually be 10-stories tall.

In addition to a research facility and data center, the facility will feature a variety of employee perks, including basketball and sports courts, and cafes.  The 1.1 million square foot project will feature lush, open, outdoor gardens.

Outdoor gardens
Outdoor gardens abound in the planned grounds.

The towers themselves will be filled with more indoor gardens.  Trees, ground plants, and flowers will enliven the sections of the building connecting office space with indoor atriums and dining facilities.  The buildings will be clad in white metal and clear glass to naturally heat the building in the winter and to reduce the need for electric lighting.

Samsung building
The towers themselves will feature more indoor gardens, as well as solar lighting/heating.

The project is being supervised by top design firm NBBJ, who plans to start work on the "ultra-green" campus in July of this year.  The campus will finish sometime around 2015.

California Gov. Jerry Brown plugged the plan in a recent speech, remarking, "The new facility in San Jose will place at least 2,500 people in high-skill, high-wage jobs."

III. Venture Capital Efforts Expand, As Well

Samsung's $1B USD venture capital fund -- one of the world's largest -- will be complemented by a new $100M USD "early stage" fund for startups, which will be run out of the new facilities.  Samsung plans on targetting U.S. startups with roughly 80 percent of its investments.

Among the recent investments, Samsung Capital sunk $22.5M USD into OpenX, a promising display advertising startup.  OpenX's advertising technology could give Samsung a route to vye with Google Inc. (GOOG), should it choose to move away the company's Android operating system.

Tim Cadogan, CEO of the Pasadena company, spoke highly of the California expansion plans, commenting, "I think they're going to get a lot of attention.  There's a lot of interest in what they're trying to do. We're very pleased to be an early symbol of that new strategy."

Sources: NBBJ, LA Times



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This article is over a month old, voting and posting comments is disabled

By fteoath64 on 2/28/2013 4:12:15 AM , Rating: 2
I do not think this is a good idea but leveraging the startup market and the overall skill base would be the more appropriate thing to do.

Samsung needs to work more closely with Google and partners and gather more talent (and keep them!). But being a large company might be disadvantageous. Depends on how autonomous this centre can be.




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