Structural Difficulties
The Korea Chamber of Commerce & Industry (KCCI) recently conducted a survey with 300 export-oriented South Korean manufacturers and 66.3% of the respondents answered that their main products are in the stage of maturity. The survey covered the 13 industrial sectors of consumer electronics, wireless communications equipment, semiconductor, petroleum products, petrochemical, shipbuilding, textile, general machinery, automobile, auto parts, steel, computer and flat panel display.
The stage of maturity can be defined as one in which the growth in sales slows down and the prices and profits are on the decline. 12.2% of the respondents said that their main products are in the stage of decline, in which both the sales and profits fall. Meanwhile, the rest answered that their main business items are in the growth stage.
By industry segment, the stage of maturity accounted for 80% in computer, 75% in textile, 72.2% in flat panel display, 71.4% in wireless telecommunications equipment, 50% in automobile and 41.7% in semiconductor. The stage of decline represented 26.1% in shipbuilding, 25% in textile and 22.2% in flat panel display.
“This survey shows that not only labor-intensive industries but also the IT sector is in the face of structural difficulties these days,” the KCCI explained, adding, “Besides, things are not that optimistic in semiconductor and automobile as these are two of the sectors characterized by very rapid market changes.”
86.6% of the companies facing the slowdown in growth said in the survey that they would start new businesses in order to deal with it. 47.9% mentioned ICT convergence as their new business, followed by new materials and nano technology (28.6%), new energy (26.1%), combination with the service industry (9.7%), bio-healthcare (5.9%) and high-quality consumer goods (3.4%). No less than 65.9% of them said they are in their early stages with regard to their new business though.