Friday, November 9, 2018

[Ed] Gloomy ICT outlook


New strategy needed to avoid fall of flagship industry

The outlook for Korea's information and communications technology (ICT) industry for next year seems dark. Concerns are mounting that a cold wave will hit the sector, as the growth in semiconductors lets up and the production and export of mobile handsets slows.

According to the Korea Information Society Development Institute (KISDI), the ICT industry's output in 2019 will inch up to 519 trillion won ($462 billion), just a 3.1 percent increase from 2018. That will be a sharp setback from the 8.7 percent rise recorded in 2017 when the exports of computer chips, displays and cellphones boomed.

Its midterm prospects until 2021 are even dimmer, with experts predicting a contraction. That points to the need for the government and business officials to come up with pre-emptive measures.

KISDI warned the industry's output would fall 0.5 percent to 516 trillion won in 2020 and drop 0.8 percent to 513 trillion won in 2021. Exports will also fall 4.4 percent in 2020 and 2.4 percent in 2021.

The institute attributed the decline in the semiconductor industry to the rise of Chinese chipmakers. It predicted the memory chip market, which recorded growth of 61.8 percent in 2017 and 29.9 percent this year, would mark a single-digit increase of 9.6 percent next year.

The ICT sector has taken the lead in Korea's industrial production and exports. In the global competitiveness ranking released by the World Economic Forum, Korea took first place in ICT penetration, ranked first in the number of internet subscribers and ninth in internet-using population.

All this shows why Korea cannot let its ICT industry fall helplessly by the wayside. The Moon Jae-in administration is vowing to reinvigorate its production and foreign shipments by fusing them with other industries with the debut of fifth generation (5G) networks. We have a sense that the government's plan still stops short of seeing the comprehensive big picture, however.

Now is the time for policymakers to show great determination in maintaining the ICT industry's competitive edge so that it can bolster the entire economy, by coming up with more elaborate strategies.


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