Intigrant, a Successful Korean Telecom Equipment Firm

President Goh Beom-gyu of Intigrant, a venture semiconductor manufacturer, could not sleep for three days at the end of 2003. At that time, Intel, the U.S.-based leading semiconductor maker, sent a group of investment examiners to the Korean company to scrutinize its business plans, financial structure and patents the company held. Intel employees came to ascertain whether the small venture company really manufactured receiving tuner chips, a core part for satellite Digital Multimedia Broadcasting (DMB) handsets. After the examination, Intel invested two million dollars or two billion won in Intigrant. In fact, Intel was willing to invest more, but Goh rejected that in fear of the American company’s demanding R&D know-how in return for investment. Instead, Goh sought to find other investors. It was not difficult since Intigrant held a monopoly on the technology. In 2004 alone, the venture company received 10 billion won in investment from venture capital and companies at home and abroad.

To Become a Small but Leading Company-

Tuner chips from Intigrant receive broadcasting signals and select only the ones belonging to a particular channel. This is the essential DMB component along with a demodulator that converts analogue broadcasting signals into digital data, and a decoder that transforms digital data into visual images.

Samsung Electronics and LG Electronics make demodulators, and several manufacturers including Texas Instruments (TI) in the U.S. produce decoders.

Toshiba, a Japanese firm, also makes tuner chips, but only Intigrant has a sophisticated enough technology to make the chip the size of one third of a thumbnail. Therefore, DMB handsets made by Samsung Electronics, LG Electronics and Pantech & Curitel are equipped with Intigrant’s tuner chips. Intigrant is the only company that mass-produces such chips around the world.

The success of DMB service that enables mobile handsets to broadcast television programs depends on the size of them: small enough to carry around.

Japan started the service a year ago but the number of subscribers does not exceed 10,000. Subscribers had to carry handsets devoted to DMB service which are as big as walkie-talkies. On the other hand, in three months, more than 100,000 Koreans subscribed to the service with advantages of watching television on the go. This is thanks to Intigrant’s chips.

Each tuner chip costs about 17 to 18 dollars, or 18,000 won. In 2010, when DMB handsets become as popular as camera-incorporating handsets, the market demand will be about one billion. The chip will be used not only mobile handsets but also other mobile electronics like PDAs and MP3 players.

Ahead of Its Time-

To save rent, Intigrant leased a small office on the first floor in Bundang New Town, Gyeonggi Province. The office was located between a supermarket and a real estate broker without a window. The employees hoped to work where sunlight came in.

Their efforts produced results. The company moved from the small office of 25 pyeong in area to a decent one of 600 pyeong in area, and sales jumped from 500 million won in 2003 to 9.8 billion in the first half of this year alone. The number of employees increased from three to 55.

The key to success was thinking differently. When other people thought using color LCDs on mobile phones was a luxury, Intigrant saw the future when TV would be embedded in the mobile handsets.

The company focused its efforts on minimizing the size of tuner chips that can receive digital broadcasting from the size of a fist to a thumbnail. It took five years and 10 billion won in research and development. Now the company holds about 80 related patents.

“The key to success was thinking ahead of others in predicting the future, rather than technology itself,” said Goh.

Sang-Hoon Kim Do-Young Kim sanhkim@donga.com nirvana1@donga.com