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South Korea's tech product exports forecast to become sluggish

Posted: 11 Jan 2005 ?? ?Print Version ?Bookmark and Share

Keywords:cell phone? semiconductor? it? lg electronics?

Growth in South Korean exports of technology products will slow this year, hurt by the increasing value of South Korea's currency, the won, and the moderating growth of some of its key IT applications, including cell phones and semiconductors.

Korea Inc. exported $75 billion in IT products last year, accounting for just under a third of the nation's exports, estimated at about $254 billion by the Bank of Korea. The country's Information and Communication Minister, Chin Dae-je, is predicting a 13 percent increase in IT exports this year, to $85 billion.

China is expected to remain Korea's top IT market. Last year, China bought $19.5 billion from Korea, followed by the U.S. with $15 billion and Europe with $12.5 billion.

Since the downturn of 2001, Korea has ratcheted up average annual increases in IT exports of 24 percent. In 2001, exports hit $38.6 billion, and by 2003 were $57.5 billion, according to the ministry. Cell phones and semiconductors have been its anchor industries, accounting for $22.4 billion and $26.9 billion in exports for 2004.

Cell phones exports have doubled since 2002, largely because of major incursions into high-end segments by Samsung Electronics and LG Electronics. In the third quarter, Samsung narrowly eclipsed Motorola Inc as the world's second largest cell phone maker, and by the end of 2004 LG Electronics had passed Sony-Ericsson to take the No. 5 ranking. Together, Korea's top three handset makers, including ODM giant Pantech, took about 25 percent of the market in 2004 and should hit 30 percent in 2005, according to Dongwon Securities.

Exports in semiconductors are expected to increase nearly 4 percent this year, to $27.9 billion.

- Mike Clendenin

EE Times

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