How does the Korean electronics industry develop?

Since the 1980s to the present, the rapidly growing electronics industry has been like a locomotive, leading South Korea to become the twelfth largest trading country in the world. According to World Electronics Data, South Korea was the sixth largest producer of electronic products in the world in 1993, with an output of US$37.977 billion. 1994 was a bumper year for the Korean electronics industry, with output value growing as high as 24.6%, manufacturing various electronic products worth US$47.3 billion, and creating export performance of US$30.9 billion.

In fact, the development of South Korea's electronics industry to its current level has not been smooth sailing. In the early 1990s, South Korea's electronics industry faced economic recession and rising wages, which led to weakened competitiveness, resulting in the collapse of many small and medium-sized electronics companies and the shrinkage of large-scale investment plans; another factor affecting the development of South Korea's electronics industry It is the opening of the domestic market that has caused electronic products from Japan and other industrialized countries to flood into the Korean market, causing the profits of major home appliance manufacturers to decline and making their operations increasingly difficult. During this period, South Korea also encountered many challenges in developing international markets, especially in developing developing countries such as Southeast Asia, Mainland China and Latin America, where competition was fierce. Among low-priced consumer electronics, Korean color TVs, cassette recorders and other products are no longer able to compete with products from mainland China. Coupled with the import restrictions imposed by various countries, Korean electronic products are facing many difficulties. As stated by the Electronics Industries Association of Korea (EIAK), the Korean electronics industry is like a sandwich, sandwiched between developed countries and developing countries. However, the Korean electronics industry did not give up. Instead, it accelerated the transfer of production bases to countries with comparative interests and invested in comprehensive research and development work. After the second half of 1993, the situation improved greatly. On the one hand, it was due to the slow recovery of the world economic boom, and on the other hand, the continued appreciation of the yen. In addition, Korean companies continued to invest in the development of new products. They had a correct vision, a proactive approach, and the ability to seize opportunities. , meet the needs of the market and create a successful performance as a "powerhouse in the electronics industry".

2. Development characteristics of South Korea’s electronics industry

From the perspective of the development history of South Korea’s electronics industry, it has the following characteristics:

2.1 The focus of manufacturing is consumer-oriented. Products are transferred to industrial electronic products and parts. Currently, personal computers and integrated circuits are South Korea’s most popular export items. Especially in the production of 4MB dynamic random access memory (DRAM), South Korea's Samsung has surpassed Japan's NEC to become the world's most important supplier. South Korea has developed the world's first 256MB DRAM chip. In the future, it will be mass-produced at any time depending on the market evolution, dominate the DRAM market, and create even more amazing export capabilities.

2.2 Implement the internationalization strategy and seek overseas production locations with comparative benefits

South Korea will strengthen the establishment of R&D centers in advanced countries to attract outstanding talents to contribute what they have learned. In terms of overseas investment and operations, according to statistics from the Central Bank of Korea, the Korean electronics industry had invested a total of US$1.026 billion overseas by the end of 1993, including the establishment of 221 overseas factories with an amount of US$529 million, and the establishment of 158 sales outlets with an investment of 4.55 billion US dollars. It has established 18 R&D centers with an investment of US$42 million. In recent years, it has been investing in the Asia-Pacific region, with mainland China being a key investment area. In addition, among the recent internationalization strategies of Korean manufacturers, the most eye-catching ones are that Samsung Electronics bought 40% of the shares of AST, a major American personal computer manufacturer, for US$380 million, and Venus purchased the old American home appliance manufacturer Zenith 58 for US$350 million. % equity.

2.3 Research and development funds are huge

In order to maintain strong competitiveness, the Korean electronics industry has invested heavily in research and development and technological innovation, regardless of the mastery of mainstream product development timeliness, production process technology No effort is spared in the development of improved, cutting-edge electronic products or key components, using a large amount of manpower, material and financial resources to seize business opportunities. In addition, according to data from the South Korean Ministry of Science and Technology, in 1992, the proportion of R&D expenditures invested by the Korean industry in turnover reached 1.8%. Among them, the electronics industry invested US$1.557 billion in R&D in 1992, and the proportion of investment in R&D funds in the turnover was as high as 4.44%. It can be seen that the Korean electronics industry attaches great importance to research and development.

2.4 Actively diversify the export market

In the past, the Korean electronics industry focused on the expansion of the United States, Europe and Southeast Asian markets. In response to the rise of trade protectionism and the rise of regional economies, it is currently focusing most of its efforts on It focuses on the development of the Chinese mainland, Eastern Europe, India and Japanese markets, and the consolidation of the European and American markets through corporate mergers and strategic alliances to achieve the strategic goal of deepening the market.

2.5 The export sales of large electronics groups account for a large proportion of the country’s electronic product exports

The total export sales of electronics conglomerates such as Samsung, LG and Daewoo exceed 10 billion US dollars, accounting for South Korea’s total exports of electronic products With more than 60% of the total, exports have become the main driving force for the development of large Korean enterprises. Although the exports of large enterprises are increasing day by day, they have no hesitation in investing in R&D. For example, the three major electronics groups mentioned above allocate at least 6 to 8% of their turnover every year to pioneering work such as R&D and innovation. Therefore, they have always been able to achieve breakthrough growth and create new achievements for a long time. profit.

2.6 ***Developing new products to reduce risks has become a new trend

At present, South Korea’s main export electronic products are semiconductors, personal computers, audio products, color TVs, video recorders, Picture tubes, video tapes, microwave ovens, refrigerators, etc. In the future, product development will focus on semiconductor TFT-type liquid crystal display devices, special application ICs (ASICs), high-memory capacity dynamic random access memory, and high-resolution consumer electronics. Televisions, digital video recorders and cameras, cable television systems, information computer multimedia products, personal digital processors, code multiple access (CDMA) mobile communication systems for large computer switching communications, asynchronous transmission mode switching equipment , overall service digital network, fax machine, broadband information network-related software and devices, etc. Through the strong operation and coordination of the Korean government, research and development centers of private enterprises have sprung up like mushrooms after a rain. In 1995, there were as many as 28 new product development alliance cases in order to reduce development risks and avoid excessive financial burdens. In this kind of environment with active participation from the private sector and encouragement and funding from the government, the success of the development of the above-mentioned key products will be gradually confirmed.

2.7 The number of foreign companies investing in electronic product manufacturers in South Korea is gradually decreasing

With the strong support of the Korean government and the efforts of enterprises in research and development, most of the current electronic products and components are Competitiveness has been greatly improved. The number of products that originally relied on foreign capital for cooperative development has gradually decreased, so the Korean government has reduced controls and protections. While the domestic market is gradually opening up, foreign capital has also gradually reduced its investment in South Korea due to unprofitable investment and increasingly fierce competition. According to statistics from the Ministry of Finance of South Korea, there were only 8 foreign investments in electronics companies in South Korea in 1993, with an amount of US$45 million, a 32% decrease from the US$67 million of foreign investment in 1992. The number of projects also dropped from 17 in 1992 to 8 in 1993, which shows that foreign investment in South Korea's electronics industry has cooled down. Japan, with its convenient location, has become the most important source of foreign investment in South Korea's electronics industry. In order to protect its interests in Southeast Asia, the United States has also spared no effort to encourage its industries to invest in South Korea, ranking second in South Korea's source of foreign investment.

2.8 Well-known manufacturers and small and medium-sized enterprises work together

In the early stage of the development strategy of South Korea's electronics industry, with the strong awareness of national strength and national support, it cultivated large-scale furniture manufacturers with international competitiveness. Enterprises take incremental steps such as learning to imitate, improve production and design innovation to gradually gain visibility in the world market. It has now been completed to a stage where processes can be improved and experience in large-scale quantitative production is gained, and it has moved towards a stage of independent design and leading the launch of new products. In the future, as long as we have a correct grasp of the direction of the world market and dare to compete with our national characteristics, Korea will be able to reach a higher level in the international market. Moreover, the growth of large enterprises will drive the prosperity of small and medium-sized enterprises. In the future, the prosperity and development of South Korea's electronics industry will not only be contributed by world-class well-known manufacturers, but also more than 7,000 small and medium-sized enterprises will also play an important role.