Invest KOREA

Since the COVID-19 pandemic, digital transformation and innovation emerged as a key to solving countries’ social, economic, political, and environmental problems amidst inflation, the Russia-Ukraine war, and the US-Chinese conflict. Accordingly, major countries around the world are introducing and pursuing nationwide policies to secure leading positions in digital technology, while making every effort to maximize their own interests. The ICT industry is the foundation and core industry for Korea's digital transformation, and its importance is emphasized more than ever before.

Telephones and communication devices represent the largest segment of the global consumer electronics market. This industry, represented by smartphones, is expected to contract in 2023 in line with declining shipments of major manufacturers. Main factors behind the fall include market-related ones such as the decline in consumer purchasing power caused by inflation and the delayed recovery of the Chinese consumer market, and changes in user trends such as lengthened product replacement cycles and increased demand for used products. Under these adverse conditions, the position of Chinese companies mostly producing mid- to low-priced products is weakening, while the growth of Samsung Electronics and Apple, whose sales strategies focus on premium products, has led to a bipolarization of the smartphone market. Samsung Electronics is making an all-out effort to appeal to consumers around the world looking for a better user experience, especially by strengthening marketing in India and China with its foldable phones.

At the same time, major Korean players such as Samsung Electronics and LG Electronics are launching various electronic devices such as smart rings and smart lighting and expanding new industries in line with the spread of 5G networks, the popularity of smart homes, and the development of augmented and virtual reality technologies. They are responding to the digital transformation trend by maintaining their competitive advantage in premium smart phones and promoting new industries driven by key digital technologies.

Korea has grown into a global ICT powerhouse by championing network innovation. A case in point is Korea’s commercialization of 5G (April 2019), which was the world’s first. Korea's 5G technology is highly competitive, and the penetration rate also ranks among the top in the world.

As the development of convergence services is essential for the expansion of the 5G industry, the government and private players are investing in advancing them. By spreading specialized 5G networks (hereinafter referred to as e-um 5G), efforts are being made to boost convergence services using telecommunications such as autonomous driving, Internet of Things (IoT), smart factories, and AR/VR. On the other hand, Korea is relatively less competitive in the telecommunications equipment sector, and the growth of parts and equipment makers other than Samsung Electronics is needed. With the world’s major markets for 5G telecommunications equipment such as the U.S., Europe, and India becoming less dependent on China, competitive Korea telecommunications equipment companies are expected to seek further opportunities in overseas markets.

The global race for 6G has already begun, the next step after 5G with dramatically improved speed and latency. Korea is striving to lead the 6G era by working to demonstrate pre-6G technology (2026) and an integrated system (2030). As the 6G environment is expected to enable innovative services such as ultra-precise digital twins and UAM, Korea needs to secure its leadership in basic technologies and expand its presence in service areas.

Since the establishment of the 5G+ Strategy (in April 2019) aimed at leveraging 5G+ for innovative growth, the Korean government has announced continuous follow-up plans and is taking measures on the national level to take a early lead the global 5G market. Based on the world’s first commercialization of 5G, the government has been intensively promoting technology development and policy support to quickly develop 5G-related new industries and command global leadership. In 2022, the e-um 5G demonstration project involving a total of 42 public and private companies was launched, and in 2023, the government in an effort to spread e-um 5G convergence services is planning a demonstration project to support the search and spread of convergence services by linking service users and suppliers in the private sector.

The strategy for next-generation communication (6G) is presented in the National Strategic Technology Development Plan along with plans for spreading 5G convergence services. In the plan, next-generation communication is classified as an essential basic technology, and the government plans to devise a national strategy for 5G advancement and 6G communication development with the goal of demonstrating the world's first 6G technology (short-term) and commercializing 6G for the first time in the world and establishing standard patents (mid- to long-term).