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(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)

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    Nikkei BP BizTech, Inc.
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    Updated: Fri Sep 18 16:29:47 1998 PDT