Tracing 50 Years of Korea’s Electronics Industry Development

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The fourth installment in a twelve-part series
Saturday, October 10th, 2009

”Color TV Production Opens a New Vista” – A Story of the Early 1970s

Early 70's TV manufactured by Gold Star

Early 70's TV manufactured by Gold Star

The 1970s was a decade of an economic leap forward for Korea. The then Ministry of Commerce and Industry formulated and implemented an “eight-year plan for the promotion of the electronics industry” for the 1969-1976 period. Its three goals were to 1) develop 95 major items, 2) earn US$400 million in export turnover by 1976, and 3) raise a W14 billion promotion fund for the electronics industry. With the period split into two stages, the first stage (1969-1971) and the second stage (1972-1976), the government set a goal to develop a total of 62 electronics items, including resistors and condensers, during the first stage, and 33 items such as electronic calculators and silicon.

First Man in Charge of Electronics Industry

In an effort to promote the country’s nascent electronics industry, the government established the Office of Electronics Industry at the Ministry of Commerce and Industry in 1971. The office was then restructured into the Division of Electronics Industry in January 1973. This office, and the division afterwards, was the prime mover behind the government’s efforts to promote the country’s electronics industry. Yoon Chung-woo, an advisor to the Electronics & Information Club, a fraternity of former government officials and retired electronics engineers, was the first chief of the division. Until he was transferred to another division in 1975, Yoon supervised the promotion of the fledgling industry and the exports of domesticly made electronics goods overseas.

Yoon Chung-woo, an advisor to the Electronics & Information Club

Yoon Chung-woo, an advisor to the Electronics & Information Club

Back in August 1966, Kim Ki-hyung, a Korean-American scientist, stressed the need to promote the electronics industry during a lecture program hosted by the Seoul Shinmun newspaper. In the lecture, Kim painted a bright picture for the possibility of the country advancing into the global electronics market. In December the same year, then-Minister of Commerce and Industry Park Choong-hoon announced the government plan to foster the electronics industry. And about 40 days later, in January 1967, then-President Park Chung-hee pledged to make efforts to develop the industry in his State of the Nation Address.

“At that time five companies - GoldStar, Ideal, Shinsung Trading, Chunwoosa and Dongnam Books - exported electronics goods after assembling them with raw materials they had imported. Goods exported were mainly transistor radios, portable record players, cassette players, and flashlight batteries,” Yoon said. “Everything was in short supply back then and the environment was unfavorable. But everybody worked hard. I was determined to lure as much foreign investment as possible. And I was given discretion to make decisions on applications for such investment. I did what I could do. So I approved about 130 such applications in total when I was in charge of the Ministry’s Division of the Electronics Industry.”

Dedication and Determination

Yoon Chung-woo, an advisor to the Electronics & Information Club, was the first chief of the division

Yoon Chung-woo was the first chief of the Division of Electronics Industry at the Commerce and Industry Ministry

As Yoon recalled, Korea was able to promote its electronics industry in such a short period under such an adverse environment thanks to dedication and determination by many persevering people, be they business leaders or government officials. Under the circumstances, Yoon exemplified the model of officials of a hard-working government. His recollection shows how dedicated and determined government officials like him were back then. The Korean electronics industrialists and government officials literally started from scratch with nothing.

First Color TV Sets Rolled Out

Korea’s electronics industry met its turning point in January 1969, when Samsung Electronics was founded. Samsung Electronics’ founding signified the opening of a competitive period in the industry.

Under a policy to foster the electronics industry as a strategic export industry and enhance its international competitiveness, the government dedicated the Masan Free Export Zone and launched the Gumi Export Industrial Complex in 1974. The former has seen the proportion of electronics products account for nearly 90 percent of all export goods produced there, while the latter has played the leading role as the cradle of the country’s electronics industry.

Korea began black and white TV broadcasting in 1956. Production of black and white TV sets began in the country in 1966. In 1970, Korea started production of black and white transistor sets. By the mid-1970s, as many as 13 companies produced more than 1 million black and white TV sets a year.

At long last, in 1974, Korea National, a joint venture firm founded by Anam Industries of Korea and National Electric of Japan, produced 29,000 color TV sets, a first for Korea. But the entire quantity was exported overseas. And the country had to wait until Dec. 1, 1980 when it witnessed the first color TV broadcast by KBS 1TV. In the early 1970s, the country was not ready yet to begin color TV broadcasting, Yoon recalled.

Samsung Electronics produced 300 14” color TV sets in April 1977 under a patent license contract with RCA of the United States and exported them to Panama. Under a similar contract with RCA, GoldStar also began production of 19” color TV sets in August 1977. As a result, the combined export volume of these three color TV makers reached 110,000 sets that year.

First Semiconductor Chips

Korea’s semiconductor industry was launched in 1966 when foreign makers outsourced chip assembly to their Korean affiliates. In a technical tie-up with Amkor Electronics from the United States, Anam Industries began assembly of transistors and diodes. At that time, no Korean firms even conceived of the idea of producing memory chips. But with the founding of Korea Semiconductor in a joint venture with ICII of the United States as momentum in 1974, Korea’s semiconductor industry opened a new chapter.

Korea Semiconductor started production of wafers in August that year, but later suffered from accumulated debts. Eventually, Samsung Group bought it and founded Samsung Semiconductor based on Korea Semiconductor’s production facilities. At first, Samsung Semiconductor assembled LSI chips, transistors, and IC chips. Samsung Semiconductor was absorbed into Samsung Electronics in 1980.

Full Series Schedule
For those interested in past or future issues of this series, here isthe full schedule of the series:

July 2009: an overview
August 2009: The electronics industry is born
September 2009: Electronics industry gains momentum
October 2009: Color TV production opens a new vista
November 2009: Radios, cassettesand electronic watches change lifestyle
December 2009: The personal computer arrives
January 2010: TDX1 introduced into the local network
February 2010: TFT LCD allows determination of film thickness
March 2010: CDMA comes into commercial use
April 2010: U-technologies (part 1)
June 2010: U-technologies (part 2)
July/August 2010 : WiMAX opens

September 2010 : Era of IPTV

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