China, Emerging Giant in Electronics Market

China is expected to emerge as the largest electronics exporter in world this year with the highest market share in 8 out of 12 major export items. Meanwhile, Korea is forecast to experience a decline in market share for four items without a single item in top place on the market.

KOTRA (Korea Trade-Investment Promotion Agency) quoted yesterday a report on market share prospects for world’s electronics exporters in 2003, saying that China would lead the world market in eight items, such as mobile phones, color TV sets, laptop computers, desktop PCs, PDAs, DVD players, DVD drives, and car stereos. The report was released by JEITA (Japan Electronic and Information Technology Industries Association).

Based on productivity, research suggests that top?selling items from China have increased from two in 2000, to three in 2001, and to five the following year. This year, three items – PDAs, laptop computers, and car stereos were newly added to the list.

Prospects for Korean exports are not so bright. It is forecast that not a single item from Korea will take the largest market share this year and four items, including color TVs, DVD players, VTRs, and car stereos, will see a decrease. VTRs, in particular, are expected to face the sharpest drop in sales as production has fallen over 40% from 3.68 million units last year to 2.15 million units this year.

The report also predicts that Korea will fall behind China in the mobile phone market where Korean manufacturers were previously favored. With 130 million units on the market, China is expected to sell more than Korea, a country which increased its production by 13% to 90 million units.

Among four items not dominated by China, Japan is expected to lead in digital cameras, and car navigators, Indonesia in VTRs, and Singapore in HDD(Hard Disk Drive)s, respectively. However, China is likely to catch up with Indonesia and Singapore within two years as production of VTRs and HDDs is showing rapid growth.

Japan, which held the highest rank in four items until as late as 2000, took a turn for the worse this year, when China outpaced Japan in DVDs and DVD drives.

“China`s dominance in electronics will continue with the help of cheap labor and rapidly developing technologies,” said Mr. Hong, a foreign market trend researcher, at KOTRA. “Outbreaks of the deadly SARS, however, and its entailed damage will not influence the ongoing trend in the overall industry.”

Mi-Kyung Jung mickey@donga.com