Low market share of sensors may hinder South Korea's IoT drive

​Backed by the local government and led by electronics makers Samsung and LG, South Korea has been notching up expansions in the emerging Internet of Things. But despite being a industrial titan, it lacks a key competence in a crucial area: Sensors.

According to the Korea Electronics Technology Institute (KETI), South Korea's worldwide sensor market share was only 1.7 percent as of 2013. On the other hand, the United States, Japan, and Germany possessed 31.8 percent, 18.6 percent, and 12.2 percent of global market share, respectively.

Sensors have became one of the core factors for building the infrastructure for the Internet of Things (IoT), being an integral part of communication networks and artificial intelligence.

South Korea has had the prescience, but not the competence, to grow sensors. Back in 2007, the government invested more than 381 billion won ($351 million) for research and development in the area. The results were nil.

Samsung Electronics, the flagship conglomerate of Korea Inc, designated IoT as its key future growth engine at the Consumer Electronics Show (CES) this month.

It said that it will secure competence in sensors through partnerships and investments with existing and new players that have shown promise. The sad part is that the company's little brother and key component supplier, Samsung Electronics-Mechanics, has been working on sensors for years, but the finished product was considered sub-standard. The parts maker is instead selling its goods to China, as most of the is self-produced goods fall way beneath Samsung Electronics' cut line.

At the morning seminar hosted by Korea Semiconductor Industry Association and held in early 2014, Park Hyo-derk, head of smart sensor development at KETI, said sensors are a crucial part of national industry competitiveness.

"Most of the companies in South Korea are depending on import from other countries. Increasing our competence is crucial at this point," said Park Hyo-derk.

As solution, the Ministry of Trade, Industry and Energy has upped the bet from before, and will invest 7.09 billion won ($6.52 million) in sensors starting this year.

"We know the sensor market is the main problem in South Korea, It's a big step forward to us to have secured this investment plan for 2015," an industry ministry's official told ZDNet Korea.

Source: ZDNet Korea (zdnet.co.kr)