Home > Information > Korea Economy > Info. and Comm.
Korea's Information and Communications Industry
Industry Overview
The communications equipment industry manufactures apparatus that lets users send and receive information in the form of voice, text, etc. In general, communications equipment is divided into wire and wireless.
- Wire communications equipment includes switching systems and transmission equipment, while their wireless counterparts include mobile phones, base station equipment and repeaters for wireless communications.
The communications equipment industry is affected directly by changes in demand for communications service and the level of facilities investment.
- The communications apparatus industry, including handsets and communications equipment, is technology-intensive, which requires large-scale investment in most cases, and exhibits R&D risks, technological implications for other industries, and heavy dependence on technology personnel.
The communications apparatus industry plays a key role in establishing a sophisticated information-based, or ubiquitous society. Furthermore, it continues to create new sources of demand as applications of convergence expand further in scope following convergence with new technologies.
- In particular, the wireless communications apparatus sector will likely further expand in economic implications ranging from mobile phones, equipment and infrastructure to mobile contents and software.
The Korean communications apparatus industry has shifted its focus toward sophisticated products, such as mobile phones and communications equipment, since the 1980s when it began to secure technology of its own.
- During the 1980s, Korea began to develop on its own and export TDX telephone switching technologies. Based on such technology, Korea became the first in the world to commercialize the CDMA system in the 1990s.
Status of Production and Value-Added
With the expansion in the mobile communications services market, communications apparatus has continued to increase in production, with a focus on mobile phones and equipment.
Amid contraction in the global IT market that began in early 2000, the Korean communications apparatus industry has expanded in production, while maintaining an upward trend in export and keeping domestic demand at a certain level.
- As of 2008, the Korean mobile phone market is showing signs of continued growth based on the needs of existing users to replace their old ones with new high-tech mobile phones or 3G-based mobile phones, although new sources of demand are becoming more difficult to pinpoint as the penetration rate of mobile phones reaches nearly 90%.
- In addition, following the commercialization and nationwide expansion of new services such as DMB, WiBro, and HSDPA, the demand for communications equipment designed to support the new services has also continuously been on the rise.
Production of Communications Apparatus
Production of Communications Apparatus
- 2000 : Wire Communications Apparatus(7,111), Wireless Communications Apparatus(16,648)
- 2001 : Wire Communications Apparatus(2,983), Wireless Communications Apparatus(23,764)
- 2002 : Wire Communications Apparatus(2,953), Wireless Communications Apparatus(30,398)
- 2003 : Wire Communications Apparatus(2,084), Wireless Communications Apparatus(34,005)
- 2004 : Wire Communications Apparatus(4,208), Wireless Communications Apparatus(35,693)
- 2005 : Wire Communications Apparatus(4,726), Wireless Communications Apparatus(40,381)
- 2006 : Wire Communications Apparatus(4,642), Wireless Communications Apparatus(40,588)
Unit : KRW billion
Source : Korea National Statistical Office (NSO)
Notes : 1) Due to Statistical constraints, Broadcadting apparatus are included in the wrieless communication apparatus category
2) companies with at least 5 employees
Value-Added of the Communications Apparatus Industry
(Unit: KRW billion)
| 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | |
|---|---|---|---|---|---|---|---|
| Wire | 2,489 | 1,062 | 868 | 717 | 1,806 | 1,903 | 2,618 |
| Wireless | 4,605 | 8,241 | 11,559 | 11,959 | 13,289 | 14,834 | 15,611 |
| Total | 7,094 | 9,303 | 12,427 | 12,676 | 15,095 | 16,737 | 18,229 |
Source: NSO
Trade Status
The Korean communications apparatus industry has grown with an emphasis on mobile phones, thus making the ratio of communications equipment in terms of export relatively low. Recently, however, strong growth in export has begun to be seen. In contrast, with the growth in demand for equipment following the expansion of 3G services and a surge in imports on the back of the strong domestic currency, the communications equipment industry has posted a trade deficit on the whole.
Export for 2007 stood at US$31.8 billion, up 13.4% from the prior year.
- Despite growth in exports of parts for wireless communications apparatus and communications equipment following the expansion of new services since 2005, an upward trend in export has slowed down overall due to sluggish growth in the global mobile phone market led by advanced countries.
- However, export has recently shown signs of strong growth as domestic mobile phone makers take the lead in the global market with their 3G and other strategic products, and demand from overseas increases following expansion into emerging markets.
Trade Status of the Communications Apparatus Industry
(Unit: US$ million)
| 수출/수입/무역수지 | 통신기기 | 2003 | 2004 | 2005 | 2006 | 2007 | CAGR (%) |
|---|---|---|---|---|---|---|---|
| Export | Terminals | 15,435 | 21,306 | 21,220 | 18,866 | 20,690 | 7.6 |
| (Mobile Phones) | 13,355 | 18,721 | 18,883 | 16,619 | 18,644 | 8.7 | |
| Communications Equipment | 631 | 771 | 785 | 1,016 | 1,335 | 20.6 | |
| Parts | 3,345 | 4,997 | 6,484 | 8,186 | 9,815 | 30.9 | |
| Total | 19,411 | 27,074 | 28,489 | 28,068 | 31,840 | 13.2 | |
| Import | Terminals | 813 | 862 | 1,098 | 1,558 | 1,558 | 17.7 |
| (Mobile Phones) | 112 | 123 | 233 | 712 | 508 | 45.9 | |
| Communications Equipment | 949 | 920 | 1,138 | 1,396 | 1,766 | 16.8 | |
| Parts | 1,578 | 2,111 | 2,088 | 2,416 | 2,837 | 15.8 | |
| Total | 3,340 | 3,893 | 4,324 | 5,370 | 6,161 | 16.5 | |
| Trade Balance | Terminals | 14,622 | 20,444 | 20,122 | 17,308 | 19,132 | |
| (Mobile Phones) | 13,243 | 18,598 | 18,649 | 15,907 | 18,137 | ||
| Communications Equipment | -318 | -149 | -353 | -380 | -431 | ||
| Parts | 1,767 | 2,886 | 4,396 | 5,770 | 6,978 | ||
| Total | 16,071 | 23,181 | 24,165 | 22,698 | 25,679 |
Source: Korea International Trade Association (KITA) trade statistics database (MTI)
Korea's Major Trading Countries in the Communications Apparatus Industry (2007)
(Unit: US$1,000)
| Export Country | Import Country | |||||
|---|---|---|---|---|---|---|
| Country | Amount | Ratio (%) | Country | Amount | Ratio (%) | |
| 1 | USA | 6,458,517 | 20.3 | China | 2,585,808 | 42.0 |
| 2 | China | 5,793,474 | 18.2 | USA | 828,777 | 13.5 |
| 3 | Hong Kong | 1,809,009 | 5.7 | Japan | 741,964 | 12.0 |
| 4 | UK | 1,621,761 | 5.1 | Malaysia | 348,825 | 5.7 |
| 5 | France | 1,473,092 | 4.6 | Thailand | 275,269 | 4.5 |
| 6 | Germany | 1,326,585 | 4.2 | France | 185,220 | 3.0 |
| 7 | Japan | 984,768 | 3.1 | Germany | 184,866 | 3.0 |
| 8 | Russia | 976,581 | 3.1 | Singapore | 146,928 | 2.4 |
| 9 | Brazil | 856,001 | 2.7 | Mexico | 125,355 | 2.0 |
| 10 | Italy | 759,810 | 2.4 | Hong Kong | 115,085 | 1.9 |
Source: KITA trade statistics database [MTI]
Despite heavy export dependence on the United States, Korea has recently diversified in the countries and regions to which it exports like China and Europe. In contrast, China has emerged as the largest importer of Korean communications apparatus.
Number of Companies and Employees
As of 2006, the Korean communications apparatus industry consisted of 1,767 companies, of which wireless communications apparatus manufacturers accounted for nearly 76%.
Number of Korean Communications Apparatus Manufacturers
- 2000년 : Wire Communications Apparatus(522), Wireless Communications Apparatus(838)
- 2001년 : Wire Communications Apparatus(508), Wireless Communications Apparatus(877)
- 2002년 : Wire Communications Apparatus(497), Wireless Communications Apparatus(1,029)
- 2003년 : Wire Communications Apparatus(435), Wireless Communications Apparatus(1,145)
- 2004년 : Wire Communications Apparatus(383), Wireless Communications Apparatus(1,183)
- 2005년 : Wire Communications Apparatus(423), Wireless Communications Apparatus(1,250)
- 2006년 : Wire Communications Apparatus(432), Wireless Communications Apparatus(1,335)
Source : NSO
The number of employees relating to communications apparatus exceeded 90,000 in 2006, a 9.5% y-o-y increase.
- The Korean IT industry, including communications apparatus, has continuously worked to secure highly skilled personnel in production and technology through a solid base of training of professional human resources. Based on this, the Korean communications apparatus industry has been performing well in terms of product quality, design, and new product development.
No. of Employees
(단위: 명)
| 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | |
|---|---|---|---|---|---|---|---|
| Wire | 19,838 | 15,337 | 14,586 | 11,471 | 10,876 | 13,378 | 13,415 |
| Wireless | 40,156 | 45,835 | 55,442 | 62,780 | 65,568 | 69,736 | 77,615 |
| Total | 59,994 | 61,172 | 70,028 | 74,251 | 76,444 | 83,114 | 91,030 |
Source: NSO
Investment by Korean Companies
Overseas investment :
- Amid continued growth in overseas investment since 2001, Korean mobile phone makers will further strengthen their investment overseas as they expand into emerging markets.
Investment in ICT :
- Korean companies invested in areas related to IT equipment systems (77.0%), maintenance and repairs concerning ICT (48.8%) and communications equipment/systems (44.7%).
- As of 2007, investment relating to communications equipment and systems totaled KRW1.14 trillion, up 15.5% from a year earlier. The upward trend is expected to continue even after 2008.
Overseas Investment by the Korean Communications Apparatus Companies
| `85~`95 | `96~`99 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | Total | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| No. of Investments |
100 | 49 | 79 | 113 | 120 | 104 | 165 | 199 | 94 | 85 | 1,108 |
| Invested Amount (US$ 1,000) |
55,657 | 135 | 50,724 | 39,854 | 63,991 | 41,038 | 87,829 | 106,316 | 75,182 | 87,871 | 608,596 |
| No. of Corporations Newly Incorporated |
41 | 49 | 36 | 1 | 35 | 24 | 54 | 28 | 13 | 19 | 350 |
Source: Korea Development Bank (KDB)
Investment in ICT by Sector (Unit: %)
Total
- 2006 : 52.0%
- 2007 : 55.7%
- IT Equipment or Systems(HW)
- 2006 : 67.3%
- 2007 : 77.0%
- Communications Equipment or Systems
- 2006 : 40.5%
- 2007 : 44.7%
- SW
- 2006 : 21.3%
- 2007 : 25.3%
- ICT service
- 2006 : 16.2%
- 2006 : 19.3%
- ICT Maintenance & Repairs
- 2006 : 50.9%
- 2006 : 48.8%
Source : Korea institute for Electronic Commerce (KIEI), [2007 Survey Findings on Domestic e-Business Status] (march 2008)
result time
