Korea rises to world's fourth biggest digital electronics industry exporting country As last year's electronics industry exports surged past the $100 billion barrier, new challenges facing Korea's electronics exports in the $100 billion era are coming to the fore. Experts point out that it is becoming difficult as time goes by to expand export markets owing to rising competition with China, the world's manufacturing center, explaining that Korea cannot afford to be complacent based on past accomplishments or to simply dream now. They are unanimous that the nation's export structure and also trade losses are getting bigger as export increases raise other problems, since the source technology is lacking and the parts and material industry are not fully developed. The phenomenon of export products' preponderance is also at a dangerously high level. As semiconductor exports break through $30 billion and Samsung Electronics cellular phone production reaches 100 million units, along with digital electronics exports of $100 billion last year, the relative importance of some export items, including semiconductors, cellular phones and display is excessively high. Fortunately, export destinations that were hitherto concentrated on three nations, namely the United States, the EU and Japan, are now being diversified to the so-called BRICs (Brazil, Russia, India and China), with priority given to China this year. Industry experts thus explain that a new vision and strategy are necessary beyond the digital electronics industry' $100 billion export era, such as nurturing nextgeneration key export items like the eight items of the IT 839 strategy and widening export fields to service fields, such as technology. It is necessary to diversify export markets to compete against latecomer competitors like China and it is also important to proactively deal with the Free Trade Agreement (FTA) expansion trend. The important aspect regarding quantitative export enlargement is a structural problem solution. Relevant business circles have to prevent sluggish domestic growth continuing even though exports are doing well, but this is not linked to domestic demand. To this end, nurturing the domestic parts as well as material industry is indispensable. The supply of domestic-manufactured parts and materials is necessary for producing export goods and trade can be kept in the black by equipping the nation with parts & material competitiveness, experts say. Hub role as core growth engine of Korean economy The Ministry of Commerce, Industry and Energy (MOCIE) forecasted that 2005's electronics industry exports would reach $102.9 billion, up 6.5% in comparison with the preceding year. The electronics industry $100 billion breakthrough is just 33 years after Korea had accomplished electronics industry $100 million in past 1972 and in the meanwhile the electronics industry export had grown 738 times, increasing 22.2% on an annual average. With this, Korea has come to consolidate its phase as one of the four largest digital electronics industry export countries in the world, following Japan, the United States, and China. An official responsible for electronics industry exports at MOCIE explains: "Export item and export market's diversification were attained as export item changed from radio as well as transistors to semiconductors, cellular phones, premium life household electric appliances, and display. Five key export items, including semiconductors, cellular phones, computers, color TVs, and display have increased 100-fold at the lowest estimate and 22,000 times at the highest estimate in comparison with the initial export year." The digital electronics industry is playing a role as the core growth engine of Korea's economy as its relative importance in exports reaches 38 percent of total exports, and its production's specific gravity also reaches 26 percent based on such performances, in addition to that the government is driving exports forward in earnest by preparing the "2015 Digital Electronics Industry Development Strategy" to raise digital electronics exports to $300 billion and world market share 14 percent by 2015. Commenting on the significance of electronics industry exports of $100 billion, MOCIE officials note that the $100 billion export accomplishment is a significant milestone just 33 years after the $100 million breakthrough in 1972, and 29 years after $1 billion breakthrough in 1976, as well as 18 years after $10 billion accomplishment in 1987 and six years since $50 billion accomplishment in 1999. In addition, this record means that the same level has been accomplished with the entire total export scale of Korea in 1995 with one single industry alone. But key exports items, particularly key item's export extensions such as semiconductors, cellular phones and display, led the $100 billion export accomplishment, with five key items' export contribution rate, such as semiconductors, cellular phones, computers, color TVs and display (LCD) reaching 71.9 percent By major export counterparts as well, market's diversification is under way as export expansion to developing countries such as BRICs continues growing, with priority given to China. Aiming for $300 billion exports and 14% global market share by 2015 Semiconductors have become a representative export item for Korea and exports are forecasted to surpass $30 billion in 2005. Korea has developed in succession 64K in 1983, 1M in 1986, 256M in 1994, 1G in 1996, and 4G DRAM in 2001 for the first time in the world. In the case of cellular phones, they have entered the stage as digital convergence's hub equipment, which combines diverse technologies such as communication, computer, semiconductor, electronic material and display etc. In 2005, cellular phone exports were expected to reach $18.5 billion and Korea's world market share is forecast to reach to 26.5 percent In regard to display too, Korea leaped to the No. 1 TFT-LCD production country in 2002 on the basis of accumulated technology as the largest braun tube manufacturing country in the world. Household electricity appliances industry also made big strides thanks to the government's proactive electronics industry nurturing policy and export drive strategy despite its short history. The government aims to accomplish its vision to be one of the three major powers in the global electronics industry circles by 2015 with exports of $300 billion and world market share of 14% by launching the "2015 Digital Electronics Industry Development Strategy." Meanwhile, MOCIE is stressing that the Ministry will reinforce core parts materials' international competitiveness and lead next-generation technology by promoting the future's high value-added industries such as the digital entertainment industry and through BIT/NIT fusion technology development. Also, the Ministry is dealing with core source technology's shortages, and parts material industry's competitiveness fragility and so forth and is actively coping with environment change issues and technology fusion/complex trends.