Contrary to Korea's title as an ICT powerhouse, only two Korean companies are among the world's top 100 ICT companies, falling behind ICT competitors such as China, Japan, India, and Taiwan, starkly revealing Korea's low competitiveness in the ICT sector, particularly in software and fabless.

The Federation of Korean Industries recently announced the results of its analysis of the world's top 100 ICT companies by market capitalization using S&P Capital IQ, a corporate analysis database.

According to this, only Samsung Electronics, ranked 9th, and SK Hynix, ranked 56th, were listed among the world's top 100 ICT companies by market capitalization.

Among the top 100 ICT companies, 56 are American companies, accounting for half, while 9 are from China, 8 from Japan, 4 from India, and 3 from Taiwan.

When we expand the scope to include the top 200 companies, which are the next generation of companies that will enter the top 100 in the future, the number of Chinese companies has increased rapidly to 27, and many of them are in the group of next-generation ICT leaders.

While 17 Japanese companies were included, demonstrating that Japan's ICT potential remains robust, the number of Korean companies was limited to five, with the addition of emerging digital companies such as Samsung SDI (114th), Naver (120th), and Kakao (133rd).

Korean semiconductor companies in the top 200 include DB HiTek (132nd), Leeno Industrial (140th), and LX Semicon (153rd), Simtech (185th), etc. rose in the rankings.

In addition, the ratio of our company's R&D investment to sales was 7.4%, which is very low compared to competitors such as the United States (17.1%), the Netherlands (15.4%), Japan (13%), and Taiwan (9.5%), revealing that we cannot be optimistic about the future competitiveness of semiconductors.

In particular, Japan is aggressively pursuing a national semiconductor revival strategy, rapidly increasing its R&D investment ratio relative to sales from a mere 3.5% in 2019 to just two years ago.

Japan passed the "Economic Security Promotion Act," which focuses on securing semiconductors, and attracted Taiwan's TSMC's new plant and research and development center to the country, investing approximately 495 billion yen (approximately 4.7 trillion won) in government subsidies in the process.

The United States is also expected to see more active investment in the semiconductor sector if the Biden administration passes the $52 billion (approximately 68 trillion won) Semiconductor Investment Support Act (CHIPS).

Compared to major countries actively investing national resources in semiconductors, Korea's situation is somewhat disappointing.

According to statistics on the proportion of government subsidies to sales of major global semiconductor companies provided by the Federation of Korean Industries to the OECD, Korea recorded the lowest level (Samsung Electronics 0.8%, SK Hynix 0.5%) compared to China's SMIC 6.6%, the US's Micron 3.8%, and the Netherlands' NXP 3.1%.

Kim Bong-man, head of the International Headquarters of the Federation of Korean Industries, said, “Although Korea is an IT powerhouse, its report card in the harsh battlefield of the global market tells a different story,” adding, “It is true that the speed of digitalization of our economy is slower than expected, and it is concerning that our competitiveness in the software sector is actually low.”

Next, “In the case of cybersecurity, which is a next-generation industry, Biden and the US discussed it at the Korea-US summit in May.“As this is a promising field that the president is emphasizing for cooperation between the two countries, we need to actively invest and establish various related systems and provide support so that Korean companies can grow on the international stage,” he said.