Recent IT Industry Situations in Korea

International Conference of JSST

June 19, 2010

Yamagata

Yong-Jin Park Waseda University, Tokyo

yjp@ieee.org

Outline

• Index of Korea

• Products with large market share

• Computerization

• Samsung Electronics

• PC Game Culture

Index of Korea

• Population: 48M (1.3B) (2008)

• Per Capita GDP : $16.5K ($34K) (2008)

• Birth rate: 1.19 (1.37) (2009)

• Household broadband penetration: 97 % (2008)

• Mobile phones: 44.98 M(2008)

Top Level industries

• IT (Electric Machinery)

• Steel (Posco: 4th)

• Automobile (Hyudai : 6th)

• Construction

IT Export Rate

• Export rate of IT products

–33.25% in 2009

• Main products (2009)

–Mobile (23.7%)

–Semiconductor (23.6%)

– Display Panel (21.9%)

Top 3 IT Companies

Samsung Electronics

LG Electronics

Hynix Semiconductor

Source: The Economist, March 2010

Rank １９８８ ２００９

１ ＮＥＣ Intel (14.6%)

２ Toshiba Samsung (7.7%)

３ Hitachi Toshiba (4.2%)

４ Motorola TI (4.0%)

５ TI ＳＴ Micro electronics (3.7)

６ Fujitsu Qualcomm (2.8%)

７ Intel Hynix Semiconductor (2.6%)

８ Mitsubishi Renesas Technology (2.5%)

９ Matsushita AMD (2.3%)

１０ Phillips Infineon Technology (2.1%)

Japan’s share : 51.0％ Japan’s share : 7 % Source : Gartner , Mar 2010

Semiconductor World Market Share

Samsung

Electronics

35.5%

Hynix

Semi-

conductor

21.7%

Elpida Memory

16.9%

US Micron

Technology

12.7%

Taiwan Nanya

Technology

5.5%

Others

7.7%

World DRAM market share in Q3, 2009

Source: iSuppli NIKKEI ELECTRONICS 2010.2.22

TV World Market Share

Rank Company Market Share

1 Samsung 23.6%

2 LGE 13.0%

3 Sony 11.5%

4 Panasonic 8.0%

5 Sharp 5.4%

others 38.6% http://blog.taragana.com/business/2010/03/09/global-tv-market-share-at-a-glance-39650/

Q4, 2009

LCD Display World Market Share

Rank Company Market Share

1 Samsung 37%

2 Sharp 25%

3 LG Display 20%

4 AUO 9%

5 IPS-Alpha 8%

6 CMO 1% * Source: DS

Q3 2008

Nokia

38.3%

Samsung

Electronics

20.1%

LG Electronics

10.5%

Sony-Ericsson

5.1%

Motorola

4.9%

Others

21.1%

Japanese

Makers

3.0%

Nikkei 2010.6.12

World Market Share of Mobile Phone

Computerization

OECD Broadband Subscribers per 100 inhabitants, June 2009

0

5

10

15

20

25

30

35

40

Source: OECD

Other Fibre/LAN Cable DSL

OECD Broadband subscribers per 100 inhabitants, by technology, June 2009

OECD average

UN E–Government Development Index 2010

Top 20 Countries Country Index

Republic of Korea 0.8785

United States of America 0.8510

Canada 0.8448

UK and Northern Ireland 0.8147

Netherlands 0.8097

Norway 0.8020

Denmark 0.7872

Australia 0.7863

Spain 0.7516

France 0.7510

Singapore 0.7476

Sweden 0.7474

Bahrain 0.7363

New Zealand 0.7311

Germany 0.7309

Belgium 0.7225

Japan 0.7152

Switzerland 0.7136

Finland 0.6967

Estonia 0.6965

Source: UN E-Government Survey

Reasons of Broadband Development in Korea

• End of 1997 : Monetary Crisis

• 1999-2002: Government invested KRW 1.1B for broadband infrastructure

• About 20% of the population (48M) live in Seoul and more than half of them live at apartment houses.

• Nationality:

– quick, quick

– me, too

Samsung Electronics

Source: Nikkei Business ２００５．１１．２１

A bunch of companies cannot withstand Samsung - Comparison between Samsung and major 11 electrical

machinary companies-

0

100

200

300

400

500

600

700

800

900

1000

Samsung Electronics LG Electronics Major 9 electric

machinery companies

in JP

Operating Profit in 2009 (Unit: Billion JYP)

History of Samsung

• 1969: Samsung Sanyo (Vacuum tube black-white TV)

• 1983: starting semiconductors

(1992: 1st rank in DRAM)

• 1985: mobile phones

• 1995: CDMA, LCD

External Factors of Success

• Analog Technology Digital Technology

– Main Frame PC

– 1st Generation (AMPS) 2nd generation (GSM, PDC, CDMA)

– Home Appliances Digitalization

• Making use of crisis restructuring

– IMF Crisis in 1997

– Global Economy Downturn in Jan 2009

Internal factor of success • Kunhee Lee’s Ownership and Leadership

– Speedy decision making – Fearless Intensive investment

• Recruiting talented people worldwide – International Recruit Officer

• Promote experienced people from outside • Training employees • Super-elitism • Globalization • High Income/Incentive • No labor union

Recent messages of KH Lee

• In early 1990s, “Change everything except your wife.”

• In 2010, “Most of Samsung’s flagship businesses and products will become obsolete within ten years. We must begin again. We must only look forward.”

Global Human Resource

• 4,000 researchers in 16 countries

• Resident employees in 80 countries

• 600 foreign employees in Samsung HQ

– China (140), Russia (120), India (100), USA (40), Japan and others (200)

– making best environment

• Providing apartment

• Helper to help them with household chores

• shuttle bus service to foreign school for their kids

Globalization at LGE

• 4 foreigners among 7 top management.

• English is becoming an official language.

• 90% of documents to executive officers is English.

• Internal web site uses only English.

• Meetings chaired by project leaders are done in English.

Training and Education

• 13 training centers in Korea, whose total capacity is 4,000 persons/day.

• Samsung sends 200~300 young people to oversea for one year from 1990 to learn a foreign language and make a human network.

( NEC sent 40 people from 2010.)

Academic-Industry Collaboration

• Creating Dept of Semiconductor System In SKKU – Started in 2006 (enrollment: 100)

– Lectures done by SKKU and Samsung (50:50)

– 50% of lectures are done by English

– Full scholarship

– Guaranteeing to enter Samsung

– Gradate Condition: TOIEC 850

• Creating Graduate courses of Dept of Mobile Systems in three universities

Academic-Industry Collaboration

• Sending engineers to Graduate Schools in 6 universities

– 100 engineers annually

– Master: 1+1 years

– Doctor: 2+2 years

• Sending engineers as full-time students

– Overseas: 15 (MIT, GIT, UCB, UIUC, etc)

– Domestic: 20

PC Game Culture in Korea

Documentary video by PBS, March 2009

“South Korea : Stories from the Most Wired Place on Earth” – Professional Gamers

– Fans

– Game TV Channel

– PC Bang (Room)

– Internet Addiction • Internet Addict

• Internet Addiction Treatment Center

Thank you!