The electronics industry will continue to lead the national economy if it bolsters its efforts for development of core technology, securing standards, and preoccupation of the market, Minister of Commerce, Industry & Energy Lee Heebeom said.
Commenting that the nation's electronics industry has secured a high level of competitiveness, considering demand conditions, production base, and technology development level, Minister Lee said, "The nation's electronics industry is leading the global market in semiconductors, display and mobile phone sectors."
"To keep this superior position, however, we need to solve such problems as the shortage of original technology and heavy dependency on foreign-made core parts and materials," Lee said in an interview with Korea IT Times. Minister Lee said that almost all electronics products have been becoming digitalized and connected each other through networks thanks to the rapid development of digital technology.
"Accordingly, the scope of the electronics industry will expand further as electronics makers are persistently introducing new services, including DMB and portable Internet, to meet diversified consumers' demands," he said. Asked about the ministry's strategy for activation of domestic consumption and exports of digital TV, he said, "The domestic consumption market is too sluggish nowadays."
However, the active supply of digital TV is expected to activate the domestic consumption market significantly." In line with this, the government will encourage manufactures to develop digital TV for general public and strengthen their activities to enhance consumers' recognition of digital TV, he said.
"As a means of accelerating the nation's exports of digital TV, domestic manufacturers need to develop differentiated export items and bolster their marketing activities according to export regions. They are also required to continuously push for localization of core parts and development of advanced technology," said Lee.
Related to this, the government is considering adding two-way digital TV boasting of advanced technology to the list of items subject to ITA and imposing no customs duties on the product, he said.
On the recent trend of semiconductor prices and prospects for its exports, Minister Lee said, "The DRAM price, which recently fell, is expected to rise again in September, affected by the beginning of the new semester. On the other hand, the price of Nand Flash is likely to continue its declining trend due to an expansion of flash memory by Hynix, an expansion of 300mm line facilities by Samsung Electronics, and the market participation by the Japanese RENESAS."
He anticipated that the export growth rate of semiconductor products would slow down somewhat until the third quarter, mainly affected by the fall in memory semiconductor price.
"Although demands for semiconductor products are increasing, the export price of the goods is expected to fall slightly amid worries over an increase in production of DRAM and flash memory in the latter half. From the third quarter when the stockpile of PC is expected to disappear, however, the demands for semiconductor products, including digital home appliances, are likely to go up again," Minister Lee said.
Early this year, the government forecast that the nation's semiconductor exports would rise by 23.5% to $23.5 billion this year. Boosted by active exports in the first half, however, it is now anticipating that the export figure will reach $27 billion this year. In the first half of this year, semiconductor exports soared by 55.8% to $12.9 billion.
Noting that foreign companies' patent attacks against Korean-made IT products, including semiconductors, display and mobile phone, have been increasing nowadays, Minister Lee said, "The key reason behind their patent attacks is Korean firms' shortage of original technology and ability to effectively cope with disputes."
He commented that large companies are reinforcing their countermeasures by establishing a task force specializing in patent affairs, but small and medium-sized companies and venture firms are incapable of effectively coping with the patent attack. "Accordingly, the government plans to bolster its patent-related strategy in such a way as to prevent domestic companies from engulfing in patent disputes with foreign business concerns in advance by fully analyzing the contents of patent," he said. At the same time, it will help create a council comprising experts from the industrial, academic, and legal circles in major core technology sectors, where disputes with foreign companies over patents are expected to occur frequently, Minister Lee said.
To effectively help small and mediumsized companies and venture firms solve patent-related problems easily, the government also plans to establish a "patent supporting center for smaller companies" he added.
Q: The standard formula for digital broadcasting, which had been the target of dispute, was finalized. What is the ministry's strategy to activate domestic consumption and exports of digital TV
Viewing the Korean economy, exports are brisk, but domestic consumption is sluggish these days. Accordingly, active supply of digital TV is expected to greatly contribute to activation of the domestic consumption market. In line with this, the government will encourage local companies to develop digital TV for general public first. Secondly, it will make it obligatory for manufacturers to install digital set-top box at digital TV as a means of reducing manufacturing cost. Thirdly, we plan to reinforce PR activities to enhance consumers' recognition of digital TV.
Q: Would you comment on the recent trend of semiconductors price and their export price
Many experts anticipate that the DRAM price, which dropped recently, will regain its strength, rising again from early September when the new semester will begin. However, the price of Nand Flash is expected to continue its falling trend due to an expansion of flash memory by Hynix, an expansion of 300mm-line facilities by Samsung Electronics, and the market participation by the Japanese RENESAS. Meanwhile, the nation's exports of semiconductor products are expected to reach $27 billion this year, far exceeding the ministry's earlier prediction of $23.5 billion, thanks to brisk export performance.
Q: Recently, patent attacks by foreign companies have been intensifying against Korea's main export products, including semiconductors and display. What is the ministry's measure to cope with the patent attack
Foreign companies are intensifying their patent attacks against the nation's IT products, including semiconductors, display, and mobile phones. Key reasons behind the attacks are Korean enterprises' shortage of original technology and their insufficient ability to cope with disputes. Accordingly, the government will establish a special patent strategy in such a way as to prevent local companies from being entangled in patent-related disputes with foreign business concerns in advance. It also plans to establish a patent supporting center in some business lines to effectively support domestic small and medium-sized companies and venture firms.
Q: Recently, the electronics industry has been forming a new paradigm along with digitalization and wider networks. What do you think is the future of the nation's electronics industry
Boosted by a rapid development of digital technology, almost all electronics products have been digitalized and connected with each other through networks. Due to the new technology flow of the electronics industry and consumers' various demands, electronics makers are producing new services, including DMB and portable Internet, expanding the scope of the electronics industry further. Taking into account demand conditions, production base, and the level of technology development, the nation's electronics industry has already secured considerable competitiveness. Accordingly, if the electronics industry makes best efforts to develop core technology and secure standards, it will continue playing its role as an industry leading the national economy.