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Country Industry Forecast - The South Korean Electronics and Semiconductors Industry
Frost & Sullivan, Jan 2005
South Korea, the third largest economy in Asia, has become a favorite investment destination for businesses from around the world. Its political stability following its recent democracy and burgeoning exports markets is expected to propel economic growth in the near future. Stemming from its heavy reliance on technology for growth, the country’s electronics and semiconductors industry is a leading manufacturing sector. Due to its wider applicability, this sector is strongly linked to macroeconomic conditions and is also considered a leading indicator of an economy’s health. Growth in this area affects other end-user industries such as consumer electronics and computers. Owing to its strong association with the economy and other industries, trends in this industry are meticulously tracked.
The South Korean electronics and semiconductors industry has traditionally been based on mass production of memory chips solely. Consequently, the domestic production structure has evolved to be radically different from the world consumption structure. However, the government in partnership with local firms is actively working toward changing this scenario. With the domestic electronics sector and all other end-user segments showing healthy growth, the demand faced by the industry is expected to remain stable.
Over the years, the production base of electronic components and semiconductors has shifted from the developing countries of North America and Europe to the emerging markets of the Asia Pacific and Latin American regions. Low labor costs and unsaturated markets, combined with the steady economic recovery have made the Asia Pacific region attractive for the semiconductor manufacturers. With some of the world’s fastest growing economies such as China and India being part of the region, Asia Pacific is expected to exhibit accelerated growth. Demand for electronic components and products utilizing these parts are estimated to grow rapidly.
The South Korean Electronics and Semiconductors Country Industry Forecast Service uses a macroeconomic perspective to provide a focused analysis of an array of issues pertinent to the electronics and semiconductors industry. These include everything from political issues, trade policies, and industry regulations to their overall impact on the industry. Besides enabling decision makers to assess the impact of non-market forces, this analysis helps in identifying new market opportunities. It also provides a strong base for preparing contingency plans.
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