Korean ICT Players Boldly Emerge despite Global Recession
SEOUL, KOREA − Figures revealed by IMF this year confirmed how world economic conditions have adversely affected global businesses. Financial conditions have deteriorated, growth prospects have dimmed, and downside risks have escalated. In the face of the global recession, however, the Korean economy has stayed afloat and the market is growing at a rather fast pace partially due to the resilience of ICT players in the industry. Recently, the Korean companies have shown strong performance in the global market. Forbes ranked Samsung Electronics as 33rd, LG Electronics 370th, LG Display 478th, KT 655th, and Hynix 1031stin the Global 2000 list. Presented are some of the most notable Korean IT companies that have shaped the global ICT industry with innovative ideas, creative technological solutions, superior leadership, and corporate culture reform.
Samsung hits a market cap of USD 170 billion
“Japan is lagging and China has a long way to go to catch up with Korea,” said Samsung Chairman Lee Kun-hee at the International Consumer Electronics Show (CES) in Las Vegas early this year. Showing great confidence in Samsung’s position, his remark implies that Samsung is now free from the Sandwich Crisis he mentioned in 2007. He had warned that Samsung may get caught between the rise of China and the industry leadership of Japan.
Months later, his statement proved to be true. Samsung Electronics(www.samsung.com) had a market cap of KRW 188 trillion (USD 170 billion) as a share of the company reached KRW 1.3 million (USD 1,149) on March 29th. This made it the fifth-largest in the global IT industry, following Apple, Microsoft, IBM, and Google. On the same day, its market cap surpassed KRW 177 trillion (USD 158 billion) more than five Japanese electronics companies of Canon, Hitachi, Panasonic, Sony, and Toshiba. Its sales rose 21 percent from a year earlier and it is expected to hit KRW 200 trillion (USD 180 billion) later this year. Samsung’s skyrocketing stock price came from a synergy between parts and goods. Parts including Mobile DRAM, application processor, and NAND Flash have improved the competitiveness of goods including smart phones and televisions.
KT CEO renowned as an innovation specialist
As an ‘innovation specialist’, KT CEO Lee Suk-chae has recently drawn attention. It has been 10 years since KT(www.kt.com) was privatized from a state-owned company. In the beginning, the company could not overcome inefficiency and low performance stemmed from the legacy of a public company. Since his inauguration in 2009, he has emphasized the importance of changing the employees’ way of thinking through ‘Olleh Management’ which emphasizes a good corporate image, eradicating corruption, and improving work performance.
With continuous efforts, KT topped the Dow Jones Sustainability Index last year. The CEO received the IEEE industry leader award called Nobel Prize in information communications sector. Now, KT unveiled an ambitious goal of surpassing KRW 40 trillion (USD 36 billion) in sales by 2014, and becoming a global ICT convergence group. “Utilizing its network base, we will make a new eco-system where virtual goods are freely circulated, connecting the world into one network,” Lee said.
LG celebrates over 60 years of phenomenal growth
Since its establishment in 1947, the LG Group has exceptionally grown for the past 65 years. Its sales have risen to KRW 142 trillion (USD 130 billion), and the capital has increased to KRW 7.8 trillion (USD 6.9 billion). Marking the 65th anniversary, Chairman Koo Bon-moo announced three visions of ‘Managing for customer value’, ‘Securing original technology’, and ‘Fostering green businesses’ to lay the groundwork for the company’s success in the future. To secure original technologies, the company decided to invest KRW 4.9 trillion (USD 4.3 billion) in research and development, up KRW 600 billion (USD 530 million) from last year.
LG(www.lg.co.kr) began to shift its attention to ‘Green businesses’. The company plans to invest KRW 8 trillion (USD 7 billion) in their green technologies including energy and electric cars. By 2020, they estimate that 15% of total sales will come from environment-friendly products. They will focus on solar cells and smart grids in the energy sector, and on electric vehicle batteries and other parts in the automobile industry. To be a global leader for the next generation, “LG will create a corporate culture that pursues perfection in quality and performance of every product,” he emphasized.
SK Hynix leads the new paradigm of the ICT industry
Memory specialist Hynix has merged to the SK Group(www.sk.co.kr), currently known as SK Hynix. This company is the world’s second-largest memory chipmaker with over 23 thousand employees and KRW 10 trillion (USD 8.8 billion). With the trend of the IT industry changing from PC to mobile, the company will reorganize its product lines into ‘Mobile Solutions’ including mobile DRAM, NAND flash, and CMOS image sensor (CIS). The ‘Mobile Solution’ sector stands at 40% and is planning to rise to 70%. “Combining capability of communications with semiconductors, we will lay the foundation for new ICT industry,” told the company.
SK Hynix has formed an alliance with memory makers Spansion to deliver SLC NAND products at the 4x, 3x, and 2x nodes to the market. As part of the alliance, the companies will sign a patent cross-licensing agreement. Spansion will make Hynix products into embedded goods to supply applications for digital TV’s, phones, and cars. The “competitiveness of the NAND flash of SK Hynix and flash-related technologies of Spansion are complementary to meet various needs in the NAND flash market,” said Oh Chul-kwon, President and CEO of SK Hynix.
LG Uplus achieves the world’s first nationwide LTE rollout
South Korean carrier LG Uplus(www.lguplus.com) began its nationwide LTE rollout at the end of March, having spent over KRW 1.25 trillion (USD 1.1 billion) on the network. It is the world’s first to have nationwide 4G coverage, covering 99.9 percent of the country’s POPs and providing LTE service in 86 cities. The operator already has 1.5 million subscribers and is aiming to attract over 4 million by the end of 2012. The company also plans to launch an additional LTE network using 2.1 GHz frequencies spectrum later this year, which could possibly double LTE speed.
Earlier last month they announced plans to launch Voice-over-LTE (VoLTE) in October. If all goes as planned, LG Uplus will be the world’s first carrier to launch VoLTE. Other leading LTE carriers worldwide including Verizon Wireless, NTT docomo, and KDDI are said to provide the VoLTE service next year.
Samsung Display becomes an invincible giant
Samsung successfully spun off its LCD business and launched a separate company called Samsung Display(www.samsung.com). The new industry began operation after filing its incorporation registration on April 3rd. Donggun Park, the former head of Samsung Electronics’ LCD Business, was elected CEO of Samsung Display. Prior to the spin-off, Samsung’s LCD business already recorded KRW 22.7 trillion (USD 20 billion) in annual revenue in 2011. The new company became the world’s largest display manufacturer overnight with 20,000 employees and five production facilities across the world.
The new CEO said at the inauguration ceremony, “We will make Samsung Display a well-respected company through continuous efforts to supply a wide variety of customized products that provide great value to our customers.” He added, “By continually staying one step ahead of our competitors, we can make our company the very best in the display market.” This July, Samsung Display is expected to merge with Samsung Mobile Display (SMD) which posted revenues of KRW 6.6 trillion (USD 6 billion) last year. After the merger, Samsung Display will have two sectors: Liquid Crystal Display (LCD) and Organic Light Emitting Diodes (OLED), and will create the largest display company in the world with KRW 30 trillion (USD 26 billion) in total revenue.
LG Display’s plastic e-paper display(EPD) revolutionizes the E-Book market
LG Display(www.lg.co.kr), a leading manufacturer of thin-film LCD, has begun mass production of world’s first plastic e-paper display for use in E-Books. The 6” XGA (1024x768), e-ink, plastic EPD is expected to revolutionize the E-Book market with its advancement in functionality and design. Users can experience paper-like reading with a plastic substrate that is as slim as a phone protection film, with a flexible design that allows bending at a 40 degree angle from the center of the screen.
LG Display also satisfied users’ long desire for a more durable EPD. When its plastic EPD was put through repeated drop tests, from 1.5m above the ground or the average height of reading when standing, no damage resulted. The world’s first mass-produced plastic EPD from LG Display will first be supplied to ODM companies in China, followed by completed products to be released in Europe at the beginning of May.