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Japanese Companies Outplaying South Korean Firms in Material and Component R&D
Continuous Support for R&D Needed
Japanese Companies Outplaying South Korean Firms in Material and Component R&D
  • By Jung Suk-yee
  • August 26, 2019, 08:58
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Japanese material and component manufacturers are found to spend 1.6 times more money on research and development than their South Korean counterparts.

Japanese material and component manufacturers’ average R&D spending was 1.6 times that of their South Korean counterparts last year, according to a report released by the Korea Economic Research Institute on Aug. 25.

The report was based on an analysis of 2,787 South Korean and 7,330 Japanese material and component manufacturers.

The difference in R&D investment amounted to 5.3 times in the primary metal product sector. In addition, those were 5.1 times and 3.1 times in the textile industry and the chemical product and compound sector, respectively.

When it comes to the component industry, South Korean companies’ average R&D spending was 2.6 times that of their Japanese counterparts. However, this is because of a kind of illusion related to semiconductor manufacturers. South Korean electronic component manufacturers’ average R&D spending was 8.2 times Japanese electronic component manufacturers’ and this has to do with Samsung Electronics and SK Hynix accounting for no less than 96.7 percent of the total R&D spending in the local electronics component industry.

With Samsung Electronics and SK Hynix excluded from the calculation, Japanese electronic component manufacturers’ average R&D spending was 370 percent of South Korean electronic component manufacturers’ and the average of Japanese component manufacturers was 160 percent of the average of their South Korean counterparts. Besides, the former amounted to 700 percent of the latter in the precision equipment component sector.

As for 118 Japanese and 287 South Korean companies manufacturing chemicals for use in semiconductor and display production, the former’s average R&D spending amounted to US$28.6 million whereas the latter’s stood at US$700,000.

“The material and component industry of South Korea is extremely lopsided to the semiconductor sector and South Korea still has a far way to go when it comes to the other key materials and components such as chemicals and precision components,” the institute pointed out, adding, “Regulations and systems covering chemical substances need to be improved, not to mention the importance of continuous support for R&D activities in the industry.”