Korea: Innovation, Improving Corporate Governance and a Pop Culture Powerhouse

Korea has emerged as a global powerhouse in many industries. Read Portfolio Managers Elli Lee and Sojung Park’s latest on how Korea continues to create new opportunities for investors.

Over the past decades, Korea has emerged as a global powerhouse in many industries, building brands for both domestic and global consumers.

A Destination for Innovation. Korean companies dominate industries that cannot easily be replaced by global innovations. Initially, a destination for an efficient labor supply, Korea has successfully become a leader in semiconductor memory and electric vehicle-related production, adding value and innovating along the way. It is among the few countries that own dominant local platforms for internet search engines and e-commerce. Korea offers a well-balanced portfolio of both hardware brands and software capabilities.

The semiconductor memory market has consolidated over the last two decades. For DRAM, (dynamic random-access memory) which is responsible for fast storage in electronic devices such as personal computers and data centers, there are only three global players, and Korea has approximately 70% of the global production.1 Continuous technology advancements coupled with heavy capital investment have driven consolidation in the industry, helping Korean companies gain market share and deliver shareholder value.

DRAM Global Market Share

Japanese and Western semiconductor production equipment players (SPEs) have played important roles in supporting the industry’s technological advancement. Recently, we’ve seen evidence that Korea is becoming a hub for advanced technology resources. Global equipment players are opening research and development (R&D) centers in Korea to support their clients and accumulate talent to staff these centers. It has been nearly 30 years since Korea has been in the memory industry and it has assembled an experienced talent pool to support this growing equipment ecosystem. Large companies such as Samsung and Hynix, the largest DRAM manufacturers in the world,2 have begun using equipment from local manufacturers for new technology migration.