Relocation of Production
Korea’s set-top box industry is receiving a lot of attention, since the digital television switchover has been accelerating. However, its expected effects have been muted, as major producers such as Samsung and LG Electronics have moved their production lines overseas.
According to industry sources on December 31, 2013, the amount of set-top boxes made in the country has drastically reduced. The reduction is affected by the fact that LG Electronics’ production of digital television set-top boxes has recently been shifted from factories in Changwon City to those in Indonesia.
Samsung already relocated all its production lines to overseas factories about four years ago. Humax is the only company that locally makes set-top boxes for digital television.
The reason for overseas relocation lies in the fact that set-top boxes themselves have a small margin, and therefore labor cost reductions are desperately needed to cut overall costs.
Meanwhile, the number of digital TV set-top boxes that are produced locally is reported to be 1 million units per year, and Samsung, LG, Humax, and other companies are supplying equipment. In particular, the demand for set-top boxes for digital TVs is significant due to the accelerating switchover of 10 million analog cable subscribers to digital televisions.