Bright Prospects for Machinery,
Digital Electronics & Automobiles
Automobiles, semiconductor exports each likely to surpass $30 billion during 2005

Export prospects for Machinery, digital electronics, semiconductor and automobiles are bright in the second half, the government forecasts. Such industrial sectors as shipbuilding and petrochemical industry are predicted to see rising exports.
According to a report on the export performance of eight mainstay industries in the first half of 2005 and prospects for the second half, released by the Ministry of Commerce, Industry and Energy, the export value of petrochemical and steel industries surged by 39.9 percent and 36.7 percent, respectively, in the first six months of the year, due to gains stemming from a rise in raw material prices. Automobile and machinery exports did well in the first half as exports soared 25.1 percent and 24.8 percent each due to improved quality and image of Korean-made products.
Despite a drop in prices, the semiconductor industry witnessed exports to the so-called BRICs rising by 13.6 percent over a year earlier due to an expansion in the export front, while the shipbuilding sector, tiding over a problem of low-priced ship orders, saw its exports rising by 8.5 percent, said Lee Jong-geon, director of MOCIE? Capital Goods Policy Department. The BRICs are referred to the newly emerging markets - Brazil, Russia, India and China.
On the other hand, Korean-made textile exports shrank by 6.9 percent in the first half over the same period of last year due to market inroads by developing countries like China and India following the abolishment of the textile quota system, while digital electronics exports declined by 1.9 percent due to a weakened price competitive edge, influenced by the appreciation of the Korean currency, won and relocating production plants to China.
Unlike the first-half performances, the second-half export prospects for digital electronics, machinery, semiconductor and automobiles are the brightest. Digital electronics exports are projected to grow 15 percent during the July-December period in the wake of Korea Electronics Show 2005 slated for October. Semiconductor exports are forecast to soar 16.4 percent due to a seasonal demand rise and an increase in flash memory demand, while machinery and automobiles are predicted to rally into the second half as they did in the first half, with exports projected to grow 24.4 percent and 9.9 percent, respectively.
On the other hand, steel exports will likely slow down to a growth rate of 7.0 percent due to lower steel product prices, while textile exports are forecast to edge up a negligible 0.4 percent due to continued inroads by developing countries.
Taking a look into the first-half export performances, Korea's eight main stay export industries accounted for 82 percent of total exports during the period, serving as cash cows of the Korean industry, said MOCIE Vice Minister Cho Hwan-eik.
Despite such negative external price factors like a weak dollar and crude oil hikes, he said, the eight mainstay export industries are forecast to maintain their export growth. They are considered to have established a solid trade surplus foundation without being influenced by certain levels of external price factors and expenses, the vice minister said.
If Korea posts export performances as projected, six mainstay industrial sectors, except digital will post a record of exports, he said. Semiconductor and machinery will likely be single items to surpass the $30 billion market, while machinery and petrochemical sectors are expected to break through the $20 billion mark in the value of exports. nw

Minister of Commerce, Industry and Energy Lee Hee-beom