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Benefiting from the collocation, Samsung achieved an average of 12% construction costs savings. Also, as seen in Exhibit 7a, Samsung is able to keep its fully loaded costs below that of competitors. The lower cost is mainly attributed to lower raw materials cost, perhaps due to better relationships with suppliers. Moreover, Samsung, in its design and production of DRAMs, has always sought to design them around a core design. This enables Samsung to save cost since it does not have to invest additional capital for every new product that it develops. Lastly, as other competitors were reluctant to invest in larger wafers for DRAM production, Samsung went ahead to develop and master the new technology, and has stayed as a leader ever since...
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