Electronic Industry - Domestic and Overseas Investment of Two Different faces

While investment in foreign countries by Korean electronic industry increases, foreigners’ investment in Korea reduces, so the anxiety of industrial evacuation appears.

According to the report of Electronic Industries Association of Korea (EIAK) at 6th ‘The Fact of Foreign Investment in Korea and Korean Investment in Foreign Countries’, foreigners’ investment on electronic industry (including communication) in Korea was 179 cases with 1.53 billion dollars in last year and decreased by 24.8% in cases and 33.9% in amount compared to year 2000 (238 cases, 2.49 billion dollars).

On the contrary, overseas investment by Korean companies was 261 cases with 2.39 billion dollars (1.56 billion dollars of the total amount was the investment for the joint venture business of brown tube by LG group and Phillips), and increased by 24.9% in cases and 406.5 in amount compared to year 2000(209 cases, 472 million dollars).

The tendency becomes clear in this year. According to the statistics performed by Ministry of Commerce, Industry and Energy (MCIE) on the tendency of foreigners; investment, foreigners’ investment in domestic electronic industry from January to August was 80 cases with 200 million dollars decreased by 41.6% in case and 79.2% in amount compared to the same period of last year (137 cases, 960 million dollars). On the other hand, overseas investment by domestic companies showed increasing tendency with 208 cases of 610 million dollars.

EIAK commented with anxiety, “It is no wonder that companies move their production line to the country supply labor force at low cost, but if the tendency continues, the fundamental of domestic electronic industry will be weakened.”

Joong-Hyun Park sanjuck@donga.com