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Color television finally comes to South Korea market -- with a rush

March 17, 1981



Suweon, South Korea

Until late 1980, Korean electronics firms manufacturing color television sets were orphans without a home. They had invested heavily in new facilities to turn out over a million sets a year. But not a single one could be sold at home due to government reluctance to approve color broadcasting.

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Exports were the only salvation, and even this lifeline began to look horribly fragile when the United States -- by far the best market -- suddenly imposed a severe quota system that left Korean assembly lines running at only one-third to one-quarter of capacity.

Take the example of Samsung Electronics, which in 1976 established an integrated factory to produce most of the key components and assemble color televisions at Suweon, some 25 miles south of Seoul.

Its president, Kang Jin Ku, says without hesitation: "Color television production is vitally important to the health and stability of the entire Korean electronics industry, and we are no exception."

With the domestic market for monochrome television sets having run its course -- with over 7 million sets in operation, about 90 percent penetration of local house- holds -- the industry based its new strategy heavily on the assumption that the Seoul government would permit color broadcasting, and that there would be no major hindrance to exports.

Over the past two nail-biting years, it lookd as though the plan had backfired badly. The government continued to be reluctant to give the go-ahead apparently out of concern that color televisions would become an unfortunate symbol of the difference between rich and poor and would undermine efforts to creat a more "austere," less consumption-oriented Korean life style.

At the same time, the American market that had been expected to take up to 750,000 Korean-made sets annually suddenly shrank to just over 200,000 as the Carter administration imposed a stiff import quota.

And with the economy suddenly collapsing around their ears at home, the electronics companies found themselves with a domestic sales decline of somewhere around 40 percent last year.

A faint ray of hope occurred on Aug. 1 when the government finally lifted the ban on domestic color TV sales, but that made little impression when it still gave no hint of approving the start of color broadcasts. This finally came in mid-November, when the green light was given for a Dec. 1 launch.

The entire electronics industry went from one extreme to the other. Sales zoomed in December to 120,000, stripping shops and warehouses of every available set.

Recalls Deputy Finance Minister Yoong Jung In: "We made an inventory check one day and could only find four sets available for sale anywhere."

At Samsung it was chaos. Company president Kang says: "We sold 50,000 sets in December. But with firm overseas commitments to meet as well we had to turn out 850,000 sets in all. Our assembly lines were running flat out almost around the clock."

The fever lessened in the early part of 1981 -- always an off sales period as families have heavy financial commitments like school bills -- but there is still optimism of great things ahead.

Mr. Kang describes the industry's expectations this way: "We calculate that domestically we can sell as many color as we did black and white sets . . . in other words, 7 million.

"If we can sell 1 million sets a year -- and that's quite feasible -- then we can achieve our target in seven years . . . by which time the replacement sales will have begun. We shouldn't rush too much, though . . . I'd like to see output for the local market kept at around 1 million."