(Nikkei BP Group)
(No.1 High-Tech News Site in Japanese)
| 'Big Four' Conglomerates Dominate Korea's R&D; Activity
September 21, 1998 (SEOUL) -- Korea's big four conglomerates, or chaebols,
dominate research and development activity in the country.
|"Samsung Electronics Co., Ltd. Starts Mass Production of 256Mb DRAM,"
"LG Electronics Inc. Develops Second-Generation Digital TV Integrated
Circuits," and "Hyundai Motor Co. Produces Second Prototype of Solar
Powered Car," are only some of the recent business headlines in Korea.
The names of Samsung, LG, Hyundai and Daewoo -- the country's four largest
conglomerates -- are ubiquitous in leading R&D; efforts in Korea.
According to the recent survey by the Korea Industrial Technology Association
under the Ministry of Science and Technology, the four industry giants
have the lion's share of the country's total corporate R&D; expenditures.
Their combined R&D; spending, worth 6.17 trillion won (US$4.57 billion),
accounted for 59.8 percent of the total in 1997.
The gap between them and the rest of the business groups, or chaebol,
is widening. The fifth-largest chaebol, SK, which controls Korea's top
mobile phone carrier, spent only about 140 billion won (US$103.7 million)
on R&D;, one tenth of what its bigger rivals did on average.
"Much of technology development in Korea is now done by the top four
groups," the association said in its report, which contained a breakdown
of the R&D; capability of each of them. The number of R&D; centers affiliated
with the big four chaebol stood at 240, including 83 under the Samsung
Group, as of the end of 1997. That compares with the industrial total
of 3,060. Their R&D; work force accounted for 45.8 percent of the total.
Samsung has the biggest R&D; work force with 14,402, including 999 PhDs,
followed by LG with 9,436 people, including 531 PhDs; Hyundai 8,289,
including 381 PhDs; and Daewoo 6,246, including 205 PhDs. Per capita
R&D; spending of these groups reached 157 million won (US$116,300) in
1997, compared with the industry average of 120 million won (US$88,900).
Among individual companies, electronics makers are the biggest R&D; players.
Samsung Electronics had a top 27 R&D; centers as of the end of June 1998,
while LG Electronics had 20 and Hyundai Electronics Industries Co. had
13 under its roof.
These companies are also leading Korea's fledgling effort to export technology
to other countries. Korean companies have traditionally been net importers
of foreign technology, especially from the United States and Japan,
but there are a growing number of cases in which Korean companies sell
their technology abroad.
Samsung Electronics plans to make technology transfers into a profitable
business, aiming at exports worth 50 billion won this year alone. The
company has launched a task force to identify transferable technologies
and to find buyers abroad.
The company will use its pool of 30,000 patents, including 7,000 registered
abroad, in consumer electronics, semiconductors, telecommunications
and computers. The company sees its semiconductor technology as most
saleable because of its position as the world's largest DRAM producer.
The company has begun producing the 256Mb DRAM device for the first time
in the world, and at least two to three years earlier than expected.
It said it is beating its competitors by at least a year in the race
for ever faster and smaller memory chips.
(James Lim, Asia BizTech Correspondent)