Page 72 - PowerE-L05-F

Lesson 18

Korean Electronics Industry

South Korean government imposed the “Buy Korean”

policy when its electronics industry was still at its in-
fancy, relying heavily on components and materials
imported primarily from Japan. The government pro-
vided many benefits and big sum of money to fund

the industry to possess equivalent technologies and
manufacturing capabilities for electronics materials.
Indeed, it was successful in doing so. Today, Korea’s
electronic industry has climbed the global ladder but

as the government realizes its dream of being sufficient, new obstacles stand in its way. Ko-
rean manufacturers now face significant competition from other developing Asian countries,
especially China. Since suppliers rely on local manufacturers and compete only with other
conglomerate groups in the country, domestic components and other material suppliers

are not as competitive. The issue of labor costs is also a hurdle. Korean wages are higher
compared to other Asian countries. With these problems, the Korean electronics industry
is not making a good progress. These prompted the South Korean government to take sev-
eral actions. One is duplicating Japan’s Kaizen Method, which is a continuous incremental

improvement of the manufacturing cycle. Another is the re-establishment of its relation with
North Korea in order to employ low-cost labor pool. Many “low-tech” manufacturing compa-
nies now operate production facilities in North Korea. Product procurement from Taiwan is
also an option. This means that for a long term and sustainable economic growth, Korea is

now relying on an open domestic market.

Comprehension

1. What policy did the South Korean government implement during the early stage of its
electronic industry?

2. Name other electronic manufacturers in Asia.

Questions

1. Are workers in South Korea paid high salaries?

2. How did the government support its industry in the past?

Vocabulary & Expressions

impose - to enforce something that is obligatory
sustainable - able to be maintained
procurement - to acquire something with effort
conglomerate - a large business organization dealing with many commercial activities
prompted - to cause somebody to act

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