China overtaking South Korea in several industries, including smartphones

Posted on : 2014-12-09 16:09 KST Modified on : 2019-10-19 20:29 KST
Experts advise South Korea concentrate on developing core technologies and new projects to build a competitive edge

China has a larger share of the global market than South Korea in numerous major industries, a recent study shows.

Smartphones, considered one of South Korea’s leading export items, were on the list of markets where the country now lags behind China.

The Federation of Korean Industries (FKI) reported on Dec. 8 that South Korea had been passed by China in six out of eight industries: smartphones, automobiles, offshore/shipbuilding, petrochemicals, refining, and steelmaking.

In the case of smartphones, South Korea was 1.2 percentage points behind China in sales volume for 2Q14. Nine Chinese companies, including Hwawei, Lenovo, and Xiaomi, combined for a market share of 31.3%, compared to 30.1% for South Korean rivals Samsung and LG.

Just two years earlier, South Korea had more than double China’s market share for the same quarter, by a margin of 34.8% to 14.6%. The shift comes thanks to rapid strides by companies in China, the world‘s single biggest market, as well as South Korea’s lower market share in the high-end market against Apple‘s still-popular iPhone.

In automobile production, China passed South Korea back in 2009. South Korea was still ahead in production as of 2003, with 3.37 million cars (5.4%) against China’s 2.91 million (4.7%). But as of 2009 China‘s total production of 7.85 million (12.6%) put it ahead of South Korea by 2.43 million.

The gap narrowed last year to around 2.34 million vehicles, but China’s market share of 12.5% (10.97 million vehicles) remained ahead of South Korea’s 9.8% (8.63 million). Despite Hyundai and other South Korean automakers increasing production with more overseas bases, their efforts were not enough to regain the lead.

Similar situations unfolded in offshore/shipbuilding and petrochemicals. In terms of total shipbuilding/shipping orders, South Korea stood well ahead of China in 2003, by a margin of 42.9% to 13.9%. By last year, the order was reversed, with China owning a 35.0% share to South Korea’s 30.8%.

In terms of petrochemicals, South Korea produced 5.85 million tons of ethylene in 2003 (5.34%), putting it slightly ahead of China‘s 5.78 million tons. China took the lead the very next year, and by 2013 had production of 18.76 million tons (12.2%) to South Korea’s 8.35 million (5.4%).

In petroleum refining, China more than doubled its market share from 6.6% in 2003 to 13.3% in 2013, while South Korea‘s increased by just 0.2 percentage points from 2.8% to 3.0% over the same period.

In terms of total steel production, China was already well ahead of South Korea in 2003 by a 22.9% to 4.8% margin. The gap only grew in 2013: China accounted for nearly half the world’s production at 48.5%, while South Korea had retreated to 4.1%.

South Korea still holds the lead in the areas of semiconductors and displays. In semiconductors, it more than doubled its market share from 7.4% in 2003 to 16.2% in 2013, while China’s grew from 0.3% to 2.1% over the same period. South Korea’s share of displays also rose from 34.8% to 44.8%, or nearly half the global market, while China’s rose to 10.4% from essentially nothing.

“South Korea’s mainstay industries are an average of 55 years old now, which means they’ll be sixty by 2019,” said Yoo Hwan-ik, head of FKI’s industry research division.

“We ought to be focusing our energies on acquiring the core technology that will let us build our lead over China, and on discovering new projects outside the ones we‘re doing already,” Yoo advised.

By Lee Jeong-hoon, staff reporter

Please direct questions or comments to [english@hani.co.kr]

 

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