In 1938, Lee Byung-chul (1910–1987) of a large landowning family in the Uiryeong county moved to nearby Daegu city and founded Samsung Sanghoe (삼성상회, 三星商會). Samsung started out as a small trading company with forty employees located in Su-dong (now Ingyo-dong). It dealt in dried-fish, locally-grown groceries and noodles.
On 7 March, Nationalists launched the Aragon Offensive, and by 14 April they had pushed through to the Mediterranean, cutting the Republican-held portion of Spain in two. The Republican government attempted to sue for peace in May, but Franco demanded unconditional surrender, and the war raged on. In July, the Nationalist army pressed southward from Teruel and south along the coast toward the capital of the Republic at Valencia, but was halted in heavy fighting along the XYZ Line, a system of fortifications defending Valencia.
On 12 March 1938, Germany annexed Austria. Austrian Nazis broke into Jewish shops, stole from Jewish homes and businesses, and forced Jews to perform humiliating acts such as scrubbing the streets or cleaning toilets. Jewish businesses were "Aryanized", and all the legal restrictions on Jews in Germany were imposed.
On 28–29 March 1938, Hitler held a series of secret meetings in Berlin with Konrad Henlein of the Sudeten German Party, the largest of the ethnic German parties of the Sudetenland. The men agreed that Henlein would demand increased autonomy for Sudeten Germans from the Czechoslovakian government, thus providing a pretext for German military action against Czechoslovakia.