Tracing 50 Years of Korea’s Electronics Industry Development

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”Radios, cassettes and electronic watches change lifestyle” – A Story of the Late 1970s
Monday, November 2nd, 2009

”Radios, cassettes and electronic watches change lifestyle” – A Story of the Late 1970s

The fifth installment in a twelve-part series

New Lifestyle
Modern computing was conceived in the 1970s. The world's first microprocessor came out in 1971. Generally speaking, the decade was an era of inventions. But it was an era of strenuous efforts to catch up with advanced electronic technologies for Korea. Radios, cassettes and electronic watches experienced a surge in popularity, as the country’s electronics manufacturers were dedicated to producing and exporting many electronic appliances. The invention, mass-production, and exports of electronic appliances in the 1970s changed people’s lifestyle completely. To put it succinctly, their lives were different in this decade from what they had during the previous periods.

Late 1970s radios, cassettes and electronics are on display

Late 1970s radios, cassettes and electronics are on display

Topping the list of electronic appliances in the decade were radios, cassette tape players, electronic watches, and electronic micro ovens. Especially, mini cassette tape players, such as Samsung’s MyMy and GoldStar’s AhaFree, swept many young students off their feet as they found the gadgets very useful in learning foreign languages and listening to trendy music. These small, portable cassette tape players changed people’s concept of electronic gadgets, which had been bulky and heavy, and homebound. Samsung developed Korea's first micro oven in 1979 after dedicating a plant producing magnetron, the core component of micro oven.

Although the country had to wait until 1980 when it witnessed the first color TV broadcast, electronics makers had produced many color TV sets in the late 1970s since 1974. Meanwhile, the number of black and white TV sets owned by Korean households was a mere 31,707 in 1965. It increased to a whopping 905,363 in 1972. The export turnover of electronic home appliances was US$8.8 million in 1970, but it increased to US$914.5 million in 1979. That of industrial devices was US$351,000 in 1970, but it increased to US$110.6 million in 1979. And that of electronic components was US$45.6 million in 1970, but it rose to US$820 million in 1979.

Electronic Exchangers Paved Way for New Era

In July 1976, the government decided to increase the number of home telephones from 3.4 per 100 households to 16 by 1986 by introducing an electronic systems service (ESS) as part of a five-year economic development plan. Under this plan, the government established KTC with an annual capacity of producing 660,000 telephone circuits in 1977, with a view to producing ITT’s M10CN model. In November 1979, GoldStar Semiconductor began production of Western Electric’s No1A model. With technological development as momentum, the conventional space division switching system made way for the time division switching system (TDX), paving the way for an era of information and communication.

R&D Efforts

The latter part of 1970s was a harsh period for Korea due to the global economic difficulty caused by two oil shocks, inflation-induced wage rises, weakened competitiveness, and an ensuing recession. As an old saying goes, “A misfortune turns into a blessing,” the economic difficulty motivated the country to formulate new policies for industrial development and seek R&D efforts. As a result, the government founded a research center, the Korea Institute for Industrial Economics and Trade (KIET), which would conduct research and develop policies for state-of-the-art technological sectors such as semiconductors and computers, in 1976.

Late 1970s TV is on display

Late 1970s TV is on display

After its founding, KIET supported enterprises by developing technologies, including Unix operating system technology for micro computers, 8-bit microprocessor, and bipolar IC for VCR. In the same year, the Korea Electronics and Telecommunication Research Institute (KETRI) was also established to develop new communication technologies for the industry. KETRI was merged into the Electronics and Telecommunications Research Institute (ETRI) in 1984. In the meantime, the Korean Electronics Industry Association chose Dr. Kim Wan-hee, a Columbia University professor of electronics engineering, as its new chairman in 1980 in an effort to revamp its structure and renew its determination to make more policy suggestions to the government.

Godfather of Korean Electronics Industry

Dr. Kim, now 83, was visiting Seoul when the Korea IT Times interviewed him in late October. He is called the Godfather of the Korean electronics industry for his contribution and devotion to the launching and development of the industry in the late 1960s. He was invited to the opening of a special event, a special exhibition of the late President Park Chung-hee's personal articles, held at the National Palace Museum in central Seoul from Oct. 20 to 29, featuring 200 items donated mostly by his family members. The show also showcased personal letters and reports Dr. Kim exchanged with the late president, and letters his wife exchanged with Park’s wife, the late Yuk Young-soo, which he donated to the Presidential Archives and Records Administration.

Dr. Kim Wan-hee, the Godfather of the Korean electronics industry

Dr. Kim Wan-hee, the Godfather of the Korean electronics industry

Interview with Dr. Kim Wan-hee

The Korea IT Times interviewed Dr. Kim right after he arrived in Seoul in late October to listen to him about how he helped the Korean government launch and develop the electronics industry. “I was invited by President Park. He personally asked me to help him develop the electronics industry for this country. Then I continued my service to him for 13 years until he died,” he said. “I came up with a national plan for the development of the electronics and related industries for Korea, including the whole aspect of the so-called IT area, until I resigned from the chairmanship of the Electronics Industry Association of Korea. Then I started a newspaper company called the Electronics Times, then a year after I just went back to the U.S.”

Asked what his main agenda was during that time, he said, “Oh, I was advising actually, personally President Park. I came back here once every 2 or 3 months.  Actually my flight mileage for about 30 or 40 years is more than 2 million miles. It would be 25 times circling all the world. I was not only helping the president and his government developing new policies to promote the electronics industries, but also to help him negotiate with foreign countries such as the U.S. We had a tough time with the U.S. government, because of the upsurge of the Korean electronics products, it was too much for the U.S. market. So I was defending Korea on President Park and the government at Washington, D.C. I was able to give a talk at a hearing by the U.S. Congress which helped us a great deal expand our export market. At that time Korea electronics industry exported 60 percent to the U.S. market. We had quality products, and a surge of Korean products in the U.S. at a cheap price. And so I had to help the Korean government and President Park defend what they were doing. I think that was part of my assignment at that time.”

As he said, he worked entirely with the late President Park. But he worked also with officials from the then Ministry of Commerce and Industry, and with the electronics sector, including Samsung, LG (formerly GoldStar), and Daewoo. The ministry worked with him mostly on economic planning and taxation issues. Especially commenting on LG and Samsung, he said, “LG and Samsung were the two largest and they were competing with each other so badly, so that in a sense they were fighting. In sharing not only the domestic market, but also the export market abroad. Therefore, I was the one who was in the middle trying to make a compromise between them, but we had a tough time to control them because their competition was so tough and so severe, it was very hard for us to control them. But I think that because of their size and the competition helped to develop the Korean industry very fast. Now I think that their fight against each other did a lot of good things for the Korean electronics industry.”

When asked what he expected from the Korean government for the future of the industry, he said, “That’s kind of a difficult question to answer in short. I think the way technology develops, so far, human beings are able to somewhat control machines. But I think that the trend is such that we will be controlled by them, by machines, in the future. I think that machines will control us pretty soon. And there will be very little for humans to control. I’m afraid these things will come much faster than I thought.  Therefore I think we have to be very careful that we will not be controlled at any time by machines. I think we should be careful to design machines that we can still control them.”

He said in conclusion that the further growth of the electronics industry will depend on how hard policy-makers work and how hard they study the future of the development of technology and trends.

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