Country Report - South Korea

Country Report - South Korea
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Due to its importance as a global centre for the production of semiconductors South Korea is the fourth largest electronics producer globally with output of US$123.6 billion in 2019, down from US$159.4 billion in the prior year due the cyclical nature of the semiconductor sector. After increasing by 3.6% in 2016 electronics production driven by the surge in demand for semiconductors and rising prices increased by 25.0% in 2017 and by a further 13.8% in 2018 before declining by 22.5% in 2019, primarily due to the sharp fall in semiconductor output but also a 9.6% decline in computer equipment production. Semiconductor output surged by 43.5% in 2017 and 24.1% in 2018, the sector benefiting from the sharp rise in the price of memory over the period. As a result, the semiconductor segments share of production increased to 73% in 2018 from 58% two years earlier. With the price of memory plummeting combined with the general slowdown in demand semiconductor output declined by 29.7% in 2019. Although COVID-19 is expected to limit growth for many IC products the demand for memory - NAND flash and DRAM - will result in a forecasted 4.0% increase in semiconductor output in 2020 although the end result for the year will be dependent on how the pandemic plays out in the second half of the year. The South Korean companies Samsung Electronics and LG Electronics hold a leading position in the production of mobile phones with Samsung the world’s leading supplier of smartphones in 2019 while LG Electronics was also ranked in the top 10. However, the requirement to meet local content rules such as those being implemented in India and Indonesia and the need to be able to compete with Chinese manufacturers has seen a sharp increase in the use of lower cost locations. In 2019, LG Electronics announced it was planning to close its final mobile phone plant in the country and move production to its site in Vietnam. Reflecting this the production of communications and radar has declined year on year since 2014 with output declining by an estimated 13.0% in 2018. Output however increased by 1.6% in 2019 on the back of higher exports of parts but decline by a forecasted 9.0% in 2020 as COVID-19 results in a sharp fall in the global mobile phone market. Both, Samsung Electronics and LG Electronics also hold dominant positions in the production of video equipment and in particular LCD TVs. Although the migration of production to lower cost locations and the move to produce close to the market resulted in output declining year on year between 2014 and 2018, output increased by 5.9% in 2019 on the back of higher export of the next generation of models. Albeit from a low-base the production of control and instrumentation, driven in part by rising demand from the key semiconductor sector, and medical has shown strong growth in recent years. In 2020, the output of medical equipment is forecast to increase by 2.8% while control and instrumentation is set to fall by 3.5% the demand for semiconductor capital equipment offsetting a more substantial decline across the remainder of the sector.

Table of Contents

Economic Overview
Industry Structure
Production Data 2017-2020
Market Data 2017-2023
Methodologies/Guide to Statistics

Product Coverage

Computing
Office Equipment
Control & Instrumentation
Medical & Industrial
Radio Communications
Telecommunications
Consumer
Semiconductors
Passive Components
Other Components

The South Korean Electronics Industry Report provides essential market intelligence for all sizes of company from small enterprises to major global groups and for financial/management consultancies, government agencies and academia requiring a reliable overview of the electronics industry in South Korea.

Last Update: August 2020

 

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