Korea follows Japan's lead in overseas electronics factories
Seoul — South Korea plans to push its leading electronics companies into the world more aggressively.
Wholly owned or joint ventures overseas, it is felt, will enable the Koreans to get their hands on foreign technology which they still lack (and which would take too long to develop at home).
Such ventures will also help circumvent any protectionist sentiments that may spring up toward Korean electronics products adding to the flood already pouring out of Japan.
Gold Star, a pioneer in Korean electronics, has already responded by beginning construction of a plant in Huntsville, Ala., to produce 50,000 color television sets a year.
''Our aim is to export at least a third of our products through overseas factories,'' Shin Koo Huh, Gold Star's president, says.
The Huntsville factory is the first overseas venture by a Korean electronics company, but others are testing the waters in the United States, Western Europe, and South America.
There is still some caution, because the industry is only just getting back on its feet from a disastrous 1980, when domestic sales sagged 20 percent and exports were sluggish.
''We studied the idea of an American factory for a long time,'' says Jin Ku Kang, president of Samsung Electronics (and currently chairman of the Electronic Industries Association of Korea), ''but we decided not to do it for a while.
''From a production-cost point of view, we could see very little advantage. Our sets can still be competitively produced in Korea.''
The need also became less pressing when the US recently abolished an import quota for Korean color television sets.
The revival of the electronics industry was considerably aided in December 1980 by a government decision to permit domestic color television broadcasting. Manufacturers before then had production facilities all geared up purely for exports.
Domestic sales of 1 million sets were predicted for last year, but the final figure was 1.2 million, with a repeat performance expected this year.
This was fortunate, because overseas demand for Korean electronic products didn't quite live up to expectations. The industry had expected 25 percent growth, to $2.5 billion, but had to be content with $2.22 billion. But the industry lacks no ambition for the long term. Gold Star, for example, is aiming for $10 billion in overseas sales by 1986.
Domestic consumption of video tape recorders (VTRs), still very much an infant industry, have been allowed to rise. In January, the government slashed the luxury tax from 40 to 4 percent for the next two years, after which it will gradually return to its old level. Korean buyers will pay just under $1,000 for a VTR, compared with $1,400 last year.
The Koreans are late arrivals in the higher-technology fields, such as computers, but they are trying to catch up as fast as their limited financial resources allow.
Samsung is investing $15 million in semiconductor production facilities. Gold Star has established a separate research institute and a production company to develop home-grown semiconductor and computer technology.
The industry association and the government have also invested $62 million in the Korean Institute of Electronics Technology, which is devoted mainly to computer development.
At the opposite end of the business, Korea remains one of the world's biggest producers of black-and-white television sets, but industry analysts believe it won't be for much longer.
''Sales continue to grow, but prices are down,'' Mr. Kang explained. ''You can buy a set for around $50 now, which barely covers the parts and labor. We have to sell more just to stand still, and I think more companies will give up the business in the next year or so.''
This is natural, adds Gold Star's Mr. Huh, ''because our future lies in producing high-quality, high-profit goods rather than continuing to depend on sheer quantity, as we have done in the past.''