On February 15, at the Korea Testing Laboratory located at Guro-dong, Seoul, the Korea Electronics Association held a meeting explaining the Electronic Parts Purchase Plan for 2007. Approximately 140 electronic parts makers participated in the meeting, and five major domestic electronics companies -- Samsung Electronics, LG Electronics, Daewoo Electronics, Inkel, and Trigem Computer -- presented their production plans and electronic parts purchase plans for this year.
Let's take a look at the electronic parts purchase plan of five major companies: Samsung's electronic parts purchase is estimated to increase by 2.5% to 23.3 trillion Korean won (US$25.0 billion) compared with last year, LG is expected to increase 4.6% to 12.9 trillion won (US$13.8 billion), Daewoo is forecast to increase 2.1% to 1.03 trillion won (US$1.1 billion), Trigem 15% to 158 billion Korean won (US$170 million), and Inkel 6.9% to 67.3 billion (US$72 million).
Total parts purchase increase
The total electronics parts purchase is expected to increase 3.2% to 37.5 trillion Korean won (US$40.3 billion) compared with last year. By parts item, the parts for mobile phones account for 43.5% (16.3 trillion Korean won or US$17.5 billion), followed by the parts for LCD and PDP of 20.8% (7.79 trillion won or US$8.37 billion), followed by the parts for TV of 9.2% (3.44 trillion won or US$3.69 billion), and by the parts for HDD of 7.3% (2.75 trillion won or US$2.95 billion). The purchase ratio of homemade electronic parts is expected to increase to 65% (24.39 trillion won or US$26.2 billion), a 3.5% increase over the year of 2006. Meanwhile, the ratio of imported parts is estimated to decrease to 35% (13.14 trillion won or US$14.1 billion). In particular, in the case of TVs, refrigerators, washing machines, air conditioners and cleaners, the weight of homemade parts accounts for 74% to 82.2%, but in the case of PCs, hard drives and printers, the weight of imported parts is larger than that of homemade parts. An official of KEA said: "In the case of PC and peripheral devices, most domestic companies usually import the electronic parts from their Chinese subsidiaries or other overseas subsidiaries in order to save on costs. For this reason, the weight of imports is increasing."
Meanwhile, the production amount of five major electronics companies is estimated to reach 62.6 trillion Korean won (US$76.3 billion). Exports of them are expected to reach 41.6 trillion won (US$44.7 billion), and domestic sales are estimated to stand at 11.1 trillion won (US$11.9 billion). On the amount of money, the production is expected to increase 2.7%, exports are estimated to expand 2.4%, and domestic sales are forecast to grow 4.0%. On the other hand, Samsung plans to buy electronic parts of 23.3 trillion Korean won (US$25.0 billion), a 2.5% increase over the year 2006, and LG plans to increase its parts purchase to 12.9 trillion won (US$13.8 billion), a 4.6% growth over the previous year. In the aspect of a growth rate in the parts purchase, LG is larger than Samsung, but on the amount of money, the weight of Samsung is far higher than LG. Both companies, as a typical comprehensive electronic maker, plan to buy a huge amount of parts covering various fields including TVs, monitors, mobile phones, and refrigerators.
Daewoo is expected to increase 2.1%, and its main parts are composed of TVs, DVDPs, refrigerators, ranges and washing machines. Trigem is estimated to increase 15.0%, which has been calculated only based on PCs, not including the other products such as monitors and printers. A senior manager of KEA said: "It is meaningful in the sense that all five major companies plan to buy more parts than last year. Although there is no dramatic demand increase, the steady and stable purchase plan for electronic parts will be of great help to many small and medium sized parts makers."
