Digital Home Appliances, New Engine of Growth

Digital consumer electronic and `post PC` industries are emerging as a growth engine of the nation`s economy in the 21st century.

According to the industries and the Ministry of Commerce, Industry and Energy (MOCIE) on June 7, the total output of the top 5 leading consumer electronic products, digital TV, DVD player, MP3 player, digital set-top box and digital VTR, soared 36% to $1.5 billion last year from $1.1 billion a year earlier.

The sharp increase is expected to continue through this year to $2.3 billion. The production will further grow at annual 42.8% to reach $6.2 billion won in 2005.

Exports are also on the rise. Shipments of digital color TVs went up 8.7% last year over the year-earlier period, and are expected to shoot up 67.3% this year given the 29% year-on-year increase during the first three months of this year.

The digital appliance sector is, in particular, stealing the spotlight as a core of the potentially mega-scale industry, with its leading-edge technology rivaling with advanced countries such as U.S., Europe and Japan. Domestic parts equipped with global competitiveness are also giving a boost to its global prominence.

Core digital appliance parts have successfully penetrated the global market - thin film transistor liquid crystal displays (TFT LCD) grab up to 40.7% of the global pie, while wall-mount TV parts PDPs and memory chips also claiming 11.5% and 25.4% respectively.

The 9.2% high rate of broadband Internet penetration, which far exceeds both 2.25% of the U.S. and 1.26% among members of Organization for Economic Cooperation and Development (OECD), also underscores the nation`s competitive edge in the digital area where convergence of consumer electronics and high-tech technology is the key to success.

Against this backdrop, the industry and the government held `the strategic meeting for development of digital electronics industry` in Trade Club located in Samsung-dong, Seoul on June 7. At the meeting presided over by head of MOCIE Shin Kook-hwan, participants discussed ways to foster the digital consumer electronics as a core next-generation industry.

They agreed to increase export volumes of those leading-edge products from $1.9 billion last year to $25 billion by 2010, while seeking to boost its global share from 5.1% to 20% during the same period.

They also set an ambitious target for `post PC` products that combine PCs and TVs respectively with telecoms services into personal digital assistants and Internet TVs. They expect the future-oriented sector, which recorded $40 million in exports last year with a meager 0.25% global share, will grow 95% annually to ship out $3.5 billion worth of products by 2005 and further $16.5 billion by 2010, increasing its slice of the world market to 15%.

Ja-Ryong Koo bonhong@donga.com