Mobile phones & computers boost electronics sector

Increasing demand for mobile phones and computers in Korea

Demand for electronic components used in mobile phones and laptops will keep the electronics industry busy till the end of this year
by Kim Young-uk

KOREA, 21 July 2000 (JoongAng Llbo) - The demand in mobile phones and computers has made manufacturers of parts needed in these products very happy. Companies are finding it difficult to meet demand with much of their production spoken for months in adavance. Also, of the top ten companies in terms of profits, four produce electronics components.

Jung Jin-woo of the Electronic Industries Association of Korea said, "Companies are in full production mode, but as there is such a great demand for parts by mobile phone and laptop computer makers, the price for parts is expected until the end of this year."

Fiber optics cable producer, LG Cable, estimate their profits this year will top 90 billion won (about $80 million). This is a 38.5 percent increase over original estimates done in the first half of the year. The price for fiber optic cables has increased by about 15 percent here and, internationally, by about 20 percent compared to last year. A person with LG Cable commented, "With the full-scale installation of high-speed Internet lines throughout the nation and telecommunication firms like 'Thrunet' and 'DreamLine' in fierce competition to provide home Internet access, demand for fiber optic cables has gone through the roof."

The price for 'Tantal' capacitors used in almost everything dealing in telecommunications (computers, portable MP3 players and the like) have increased in price by more than 30 percent compared to last year due to the same huge demand for parts seen by LG Cable. The going price for condensors (or capacitors) is floating around $65 per thousand condensors, a $20 increase over last year. And, with increases like these, Daewoo Electronics, generating a 17 percent profit from sales of their condensors, have increased their first half projections by more than 50 percent compared to last year. Samsung Electro-Mechanics, which produces about 100 million of these condensors every month, is to increase production to 180 million units per month by year's end.

Despite this unprecedented demand in capacitors, it is multi-layer ceramic capacitors or MLCCs that are 'the' component wanted by manufacturers. Samsung Electro-Mechanics' MLCCs exports for the year are estimated at $6.5 million, 163 percent higher than estimates made in May last year. A person with Samsung said that the number of companies producing MLCCs used heavily in mobile phones has been increasing. "But, not only is demand from the mobile phone industry high but also home appliance manufacturers are pushing demand levels off the scale."

MLCCs are now being sold at $6.5 per 1,000 units, a jump up from their $5 per 1,000 units price level last year. Samsung Electro-Mechanics, which previously thought producing 7.5 billion units per month would be sufficient, have increased output to 10 billion as of last month.

Chungho Electronics & Communications produces VCXO (voltage controlled crystal oscillators) and TCXO (temperature compensated crystal oscillators) without which mobile phones would not be able to receive communication signals. These days, the company is finding it impossible to produce enough units to fill orders even with factories operating at full capacity.

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