Many High-End South Korean Products Made up of Japanese Parts

Jul 16, 2019

It is shown that Japanese parts and materials are used for various mobile and IT devices. Parts that are manufactured by Japanese businesses are ones that play important roles in adjusting telecommunication and camera functions of Smartphones. They also boast advanced technologies as they have to be used for high-tech IT devices. South Korean industries expect that there will be significant impact once Japanese Government’s regulation spreads to major parts and components of mobile devices. This means that South Korean Smartphone parts industry needs to have competitive edge that can absorb impact from unforeseen situations.
Various parts go into a Smartphone. Japanese businesses manufacture important parts such as duplexer, SAW (Surface Acoustic Wave) filter and power-amp, DC-DC converter, telecommunication cable, electronic compass, image sensor, and spacer.
Duplexer is one of antennas of a Smartphone and it divides receiving frequencies from transmitting frequencies. SAW filter filters frequencies from receiving and transmitting signals while power-amp helps speakers of an IT device to produce sound. Japanese businesses own at least 70% of the shares of markets for these products.
Smartphone camera, which has become a component that is absolutely needed for a Smartphone, includes various parts in addition to image sensor and lenses that many people are already aware of.
Spacer especially is a component that is needed to fill the gaps within camera lenses. However, Kimoto currently owns more than 98% of the shares of spacer market.
Japanese businesses also own more than 98% of the shares of markets for resin lenses. Tatsuta and others also have the upper hands in black-shield tape market that is for protecting PCB (Printed Circuit Board).
Different Japanese businesses have various lineups of products. Japanese businesses that show strengths in mobile parts are Murata, Hitachi, Kyocera, and Hirose and they introduce and sell various parts like a department store. Nitto Denko, which produces ITO (Indium Tin Oxide) film that is needed for touch-panel, attracts customers through 13,000 different parts aside from ITO film.
These manufacturers also have superior technical skills. There is a saying within the industries that Japanese parts are used for flagship products while South Korean parts or Chinese parts are used for economic products.

Many High-End South Korean Products Made up of Japanese Parts

“Samsung Electronics and LG Electronics need to consider high quality and competitive price at the same time as number of demands for mobile devices is decreasing gradually.” said one expert from the industry. “This is the reason why they have no choice but to select Japanese products.”
Industries believe that there will be significant impact if Japanese Government decides to include mobile device parts to its list of regulation.
“Although this will not be an issue for production of economic products, there will be a setback to production of flagship Smartphones.” said another expert from the industry. “Without Japanese products, South Korean manufacturers including Samsung Electronics cannot produce Smartphones.”
These experts are stating that South Korean industries and South Korean Government should take this current issue as a lesson for the future. There is already a network where Japan supplies major parts while South Korea produces final products. Experts are pointing out that there needs to be an ecosystem where impact can be negated in case of sudden paralysis of supply just like the current issue.
Experts agree that there needs to be ‘consistency’ if South Korea wants to establish an ecosystem for parts.
Businesses that involve parts are known to have many ups and downs as it is not easy to secure fixed sales due to changes in requests from customers depending on market trends.
Industries explain that Japanese businesses overcome uncertainties by securing various products through continuous research until they succeed.
“Rather than saying that South Korean businesses are not good at designing parts, there are many instances where they withdraw from their projects that have severe ups and downs.” said Professor Hwang Won-bin of POSTECH. “Japanese businesses have 10 to 20 employees operating their businesses for 70 to 80 years which helps them gain valuable knowhow.”
Some within the industry states that there needs to be collaboration between major corporations and small and medium businesses in addition to long-term support from South Korean Government.
“South Korean Government must help out areas that have many uncertainties.” said one expert from the industry. “There cannot be instances where major corporations ostracize products due to the fact that they are made by South Korean businesses even though they have good quality and competitive price.”
Staff Reporter Kang, Hyeryung | kang@etnews.com

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