South Korean Firms Hope to Mine Gold in U.S. Investments : Acquisitions: Samsung’s AST stake is the latest purchase by a cash-rich conglomerate. But they may be in for some tough sledding.

The agreement this week by electronics firm Samsung Electronics Co. to invest $378 million in personal computer maker AST Research Inc. is the latest and largest of a string of investments by South Korean conglomerates seeking a path into the booming U.S. high-tech markets.

In November, South Korean auto and shipbuilding giant Hyundai Corp. paid AT&T; Corp. $300 million for NCR Microelectronic Products, seeking to quickly boost itself from also-ran status as a semiconductor power. A year ago, Hyundai spent $150 million for disk drive maker Maxtor Corp. of San Jose.

Samsung, which wants to keep an eye on potential applications of entertainment in the multimedia world, is also reportedly considering a large investment in Dreamworks, the movie company established by Steven Spielberg, Jeffrey Katzenberg and David Geffen.

“Right now the Koreans are sitting on a huge mountain of cash,” said Dieter Ernst, a professor of economics at UC Berkeley. But with most of that money coming from a temporary spike in profits from semiconductors, “they are desperate to develop new product areas.”

Korean conglomerates first tried to get access to the American technology market by developing strategic alliances with American high-tech leaders like IBM. They were turned away in favor of more established Japanese multinationals like Toshiba, Matsushita and Sony, Ernst said.

Feeling a strong need for better access to American technology and technology markets, they turned to acquisitions, Ernst said.

But early evidence suggests the Korean investments are in for some tough sledding. Corporate cultures are typically much different, and Korean companies often lack the vision required to succeed in fast-paced technology markets, analysts say.

Semiconductors and consumer products, where the Korean companies have been successful, are exceptions, because the Korean companies typically follow the Japanese lead. In areas like disk drives and personal computers, though, the technology shifts frequently, and even Japanese companies have been largely unsuccessful.

Daewoo, one of Korea’s three largest conglomerates, was an early success in its business of supplying personal computers to computer upstart Leading Edge in the mid-1980s. But Leading Edge soon lost its market position. Although Hyundai took over the operation a few years ago, the company has not recovered.

Maxtor Corp., in which Hyundai purchased a 40% stake in late 1993, has had eight unprofitable quarters in a row. Last month, Hyundai replaced the company’s chief executive with one of its own managers.

But even if these companies take a long time to turn a profit, the Korean parents expect to eventually mine gold.

Hyundai, for example, will soon begin making disk drives for its affiliate, Maxtor Corp. With Hyundai’s strong financial support and its ability to drive down costs, analysts expect it to recover and be among the few survivors in the cutthroat disk drive business.

The most ambitious investment to date is clearly Samsung’s stake in Irvine-based AST. For Samsung, which has no personal computer business to speak of, AST offers a brand name and a distribution channel.

“From Samsung’s point of view, it gives them the chance to take a position in the world market right away,” said David Yoffie, a Harvard Business School professor and a board member at chip maker Intel Corp.

While it is unclear whether Samsung will be able to address AST’s lack of vision, Scott Miller, analyst at the San Jose-based research firm Dataquest says Samsung will bring to the company a global mind-set and a talent for “wringing costs out of products.”

Yet even if these ventures are successful, don’t expect a tidal wave of investments from South Korea. Korean companies have their plates full on a range of ambitious projects.

Samsung, for example, plans to spend billions of dollars to become an automobile producer--from scratch. And in spite of their cash piles, Korean companies must reserve money for investments in Europe and Asia, where protectionist policies make local production crucial.