Localization of Display Parts a Priority for Korea
Localization of Display Parts a Priority for Korea
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  • 승인 2006.08.01 12:01
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New Growth Engine Display Center Lagging behind Taiwan's technology development and industry structure innovation The reason why Korea, which until recently had remained a first-rate power in the field of display, has fallen behind Taiwan, lies in the fact that Taiwan is manufacturing display at competitive prices that Korea cannot match. Korea is also still not making its mark in terms of process technology innovation. Furthermore, Korea holds not only a large quantity's production facility, but also display manufacturers at home are burdened by excessive stock. Hence, today Korea's temporary competitiveness loss phenomenon is happening. In conjunction with such competitiveness forfeiture phenomenon, Konkuk University Prof. Kim Yong-bae, New Growth Engine Display Center Director, diagnoses: "When comparing process technology innovation with a competing country like Taiwan, Korea is way behind, considering efforts and capital power Korea invested to date. Taiwan is adapting a smaller-spending industry structure. Japan is initiating Taiwan with its technology power ceaselessly and actively. As a result, latecomer Taiwan came to outrun Korea within a short period." Prof. Kim added that it is a fact that Japan is strong in terms of parts too and accordingly, for Korea whose localization is still difficult, it is disadvantaged by far in terms of the price-level. Tough task to deter Taiwan's pursuit In that regard, an invisible goal of the New Growth Engine Display Center can be to secure competitiveness to obstruct Taiwan's pursuit in antagonistic circumstance among Korea, China and Japan. Kim explained that the majority of projects his New Growth Engine Display Center promotes already their basic framework, adding that technology development to develop products is the main goal. As production process technology development, part material development to be able to reduce the unit cost of production and equipment development suitable to it, gear each other, these three elements form system each other and carry out technology development. The Director said that the New Growth Engine Display Center helps companies develop growth engine display module and produce parts material as well as production equipment necessary for this. Kim explained: "Now, Korea's display industry is going toward a system of a united form with user companies". Accordingly, he insists that those who research display technology must devise parts localization as soon as possible by joining efforts with these user companies. In particular, he advised that what is necessary for Korea is a close collaboration between larger companies and smaller companies. In the case of Korea, one or two titan companies like Samsung or LG are assuming leadership of the display business whereas in the case of Taiwan, smaller companies' capability is excellent. Kim said: "Such Taiwanese smaller companies reduce export price by teaming up with larger companies and pioneer a means of escape for export continuously". Above all, Korea has to attempt a way to be able to reduce cost in orderly fashion, the Director asserted. In that context, Kim advised that Korea must attempt ceaseless improvement in terms of technology development and industry structure innovation. Frankly speaking, Taiwan focuses on just selling the country's products unconditionally abroad much, but Korea is different. Because Korea has always preferred the highest quality products and has been doing marketing as well as technology development suitable to it, time and money are spent double. Reduce cost by simplifying production process! The Director, on one hand, pointed out that up to now, the brands of larger Korean companies have not become globalized, explaining that these brands didn't consolidate their location as a worldwide brand. In such a vortex, overseas purchasers select the more recognizable Sony if each companies' products are marketed with similar prices. No matter how hard we may explain that there is a difference in its technology power, from the standpoint of non-expert is seen as exactly alike product. Thus, the U.S. wholesale dealers or distributors hope that Korean products would be tailored to match the low prices offered by Taiwan. Director Kim noted that this is the core problem which influences Korea's export capabilities. The reason why price is brought up like this, lies in that most countries' technology power became similar. To solve this problem, the New Growth Engine Display Center was formed, Kim said, adding that this period came too early than expected. He noted that now we want to compose systems, adding that larger companies, smaller companies and material, equipment & parts companies must forge cluster in one united body and devise cost reduction by allowing this cluster to operate. The other aspect needing attention is enhancement production technology power. The Director said that this must be carried out not by just the nation, but also by module companies, explaining that the efforts to enhance product quality and production technology power directly is a task to which not only domestic larger companies, but also all enterprises should devote themselves. Display's role of paramount importance As regards manpower nurturing, Kim said that there are many human strength programs in our country at the moment, citing BK21 project for graduate school students as its example. The New Growth Engine Display Center made an education program for junior and senior students in league with The Next-generation Mobile Communication Center as well as up to the Consortium of Semiconductor Advanced Research, which educates display technology to junior and senior students by selecting 5 universities nationwide as part of regular curriculum. Kim went on to mention that the Center plans to educate 300~500 people from this September, expecting that the first display manpower will be produced on Feb. 2007. In the New Growth Engine projects, the role of display is really of paramount importance, he maintained, explaining that display is expected to lead Korea's export as an export leading industry of Korea. In a nutshell, he summarized by saying, "Unless Korea reduces costs by simplifying manufacturing processes to the maximum, developing the core technology, and devising parts localization, we won't catch up with Taiwan in terms of price competitiveness."

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