"South Korea is being outspent and outmaneuvered by competitors on multiple fronts," ISuppli President and CEO Derek Lidow told the Seoul Digital Forum 2006.

Lidow noted that South Korea accounted for 48.8 percent of global LCD panel shipments in the first quarter of 2005 while Taiwan held a 41.8 percent market share. In the first quarter of 2006, Taiwan move into the top spot with a 52.2 percent share of shipments, compared to 37.4 percent for South Korea.

"Korea will not be able to regain the No. 1 position,” Lidow predicted. ISuppli estimates show South Korea’s LCD panel market share will drop to less than 40 percent by the fourth quarter of 2007. "Taiwan will remain the leader in LCD panel production for the foreseeable future," he said.

According to estimates, Lidow said are based on capital investment announced by manufacturers, Taiwanese LCD panel makers together with its Chinese production partners will grab nearly 60 percent of the world’s LCD market by the end of 2007.

Lidow said European and U.S. mobile phone makers are also outperforming Korean rivals. "The effectiveness of target marketing for the global leaders in the mobile phone business is improving at a faster pace than it is for the top Korean manufacturers,” he asserted.

Combined shipments for the top two cellphone makers—Nokia and Motorola—grew from about $180 million in 2004 to nearly $500 million in 2005. Corresponding statistics for South Korea’s two largest handset makers were $40 million in 2004 to $100 million last year.

"Recent European and U.S. product successes have halted Korean market share gains," Lidow said.

In order for the South Korean high-tech sector to rebound, it should focus on innovation through private investment funds and industrial incentives, including both venture capital and private equity investment funds.

It should also shift its emphasis from lower-margin commodity products to value-added goods and services, Lidow said.

By: DocMemory
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