ICT exports in worst fall since 2001

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ICT exports in worst fall since 2001

After Korea’s overall overseas shipments dipped to a six-year low in January, the nation’s flagship information and communications technology (ICT) exports saw the sharpest drop in 16 years during the same month.

According to the Ministry of Trade, Industry and Energy on Monday, the nation’s overseas shipments of ICT dipped 17.8 percent last month compared to a year before to post $11.86 billion. The drop is mainly due to a sales slowdown in products like display panels, semiconductors and mobile phones in emerging economies.

It was the steepest drop since January 2001, when ICT exports plunged 21.6 percent compared to a year earlier. It was also a similar pace to the month’s overall exports, which tumbled by 18.5 percent.

ICT products, ranging from smartphones to computer parts and display panels, account for nearly 38 percent of the nation’s total overseas shipments. So far, they have accounted for 90 percent of the country’s trade surplus, while shipments of other flagship products such as petrochemical and shipbuilding tumbled considerably over the past year.

Mobile phone sales shrank by 7.3 percent compared to last January to post $1.9 billion. Mobile phones maintained their growth last year while other ICT products suffered sales dips. However, the growth has turned to a minus level for the first time in six months, as sales of locally-made smartphones and overseas production using Korean parts both declined.

The main culprit was the overall slower demand for smartphones and fierce competition with lower-end Chinese smartphones such as those made by Huawei. Smartphone demand tumbled by 11.1 percent compared to a year earlier to post only about $680 million in sales. The demand was also slow, as phone makers like Samsung and LG Electronics are slated to release new products within the first half.

Shipments of smartphone parts also slowed by 4.6 percent, as slowed demand in China, Central and South America slowed by up to 77.2 percent compared to a year earlier, leading to slowed local production.

The global smartphone market is forecast to keep shrinking this year, recording a growth of 7.4 percent, compared to 13.1 percent growth last year, according to Strategy Analytics, a market research firm.

Shipments of semiconductors dropped 13.9 percent compared to last January to $4.5 billion in sales, and display panel sales shrank by 30.7 percent to post $2 billion, mainly due to slowed demand from suffering emerging economies such as South American countries and an oversupply from Chinese rivals, which pulled down per-unit prices.

Semiconductor shipments to South and Central America tumbled the most, by 61.9 percent compared to last January, and that of displays to struggling economies fell by 54.2 percent during the same period.

Shipments to South American countries halved to post $80 million. However, Korean ICT products sold well in some emerging economies. Shipments to Southeast Asian countries picked up slightly by 0.4 percent year on year.

In a report published Monday, the Korea Trade-Investment Promotion Agency advised local ICT companies not to rely on hardware shipments but to expand software.

BY KIM JI-YOON [kim.jiyoon@joongang.co.kr]

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