ICT Industry
Exports from Korea’s information and communications technology (ICT) sector and its trade balance set all-time highs in May this year.
The Ministry of Science, ICT and Future Planning recently announced that monthly exports increased 17.2% year-on-year to US$15.15 billion, while the industry’s trade balance recorded a surplus of US$8.27 billion the same month, and breaking the US$8 billion mark for the first time.
In 2011, total exports from the ICT sector increased 2.0% from a year earlier to US$156.97 billion; setting a new record for the second consecutive year. However, the volume dropped slightly by 0.9% last year due mainly to the deterioration of external conditions. In 2012, the industry posted a trade surplus of US$77.3 billion, which was close to three times that of the total for all other industries in the country, as those segments that had been lagging behind, such as the system-on-chip (SoC), succeeded in enhancing their competitiveness. The comparison shows that the ICT industry is one of the fields providing the highest added value.
In the second half of 2012, exports from the sector picked up to recover losses recorded in the two preceding quarters and set a new half-year record. The revival was led by hardware and software convergence items such as SoC products and smartphones. Industrial and security package software exports showed a substantial increase as well, rising to US$2 billion -- embedded software excluded -- for the first time.
In the semiconductor segment, exports of SoC products exceeded those of memory semiconductor chips for the first time -- US$24.5 billion Vs. US$19.3 billion -- and remained above US$50 billion for three years in a row. Local SoC manufacturers were able to emerge from the red and improve their global market share and exports by shoring up their competitiveness in the mobile sector. In the meantime, local mobile phone makers shipped an increasing amount of high-end and mid-end products abroad; accounting for approximately 40% of the global market.
Display panel manufacturers posted total exports of US$31.93 billion during the period based on their technological abilities, aggressive investment and the large global demand for mobile devices. TV exports declined slightly to US$6.29 billion owing to market shrinkage and the expansion of overseas production, yet the large-screen, premium TV segment, which covers LED TVs, continues to see solid growth.
As stated above, Korea’s ICT industry is distinguishing itself across all segments. Experts claim this has been possible thanks to the rapid development of the semiconductor industry in Korea.
The industry has served as the foundation of the country’s electronics industry for the past 30 years. Statistical data regarding the sector began to be compiled in 1992 and has topped the list of key export items ever since, with the only exceptions being in 2008, 2009 and 2011.
Korea entered the semiconductor industry in 1965, when Komi Electronics Industry was founded. The Korea-US joint venture assembled and produced transistors and is considered the father of the industry in Korea.
In the 1980s, Samsung and Hyundai entered the industry, thus accelerating its growth. Samsung Semiconductor Communication succeeded in coming up with 64K DRAMs in 1983 in just six months from the start of the business. The news was truly astonishing in that only a handful of firms in the US and Japan had the technical capabilities required for high-density memory chips.
The history of the industry was rewritten in 1994, when Samsung Electronics unveiled the world’s first 256M DRAM ahead of Japanese powerhouses. This made headlines around the world, with Samsung Electronics running TV and newspaper ads proclaiming, 'Koreans Conquer the World.’
Annual exports from the semiconductor industry topped US$10 billion in 1992, with the figure soaring to US$26 billion during the following eight years. In 2000, the ratio of semiconductor-to-total exports for Korea expanded to 15%. The US$50 billion mark was broken in 2010, with Korean companies’ share in the global DRAM market rising to as high as 60%.
Samsung Electronics ranked second in the entire semiconductor market, following Intel, in 2002, beating Toshiba, ST Micro and Texas Instruments at the same time. SK Hynix has remained in the top 10 since 2006. “There is no doubt that the government’s systemic support and industry leaders’ aggressive investment have led to Korea becoming a global powerhouse in all ICT segments, including smartphone, computer, LCD TV and many more, within such a short period of time,” said the Korea Semiconductor Industry Association.