South Korea Upstages Taiwan's Budget for 5G Development

When the Taiwan government announced on Jan. 22 to budget  NT$12 billion (US$400 million) for 5G wireless development over the next six years, the South Korea upstaged such bid on the same day with 1.6 trillion won (US$1.4 billion) over the same period.

Minister without Portfolio S.C. Chang said the planned spending enables the government to help the island’s 5G-wireless industry become one of the world’s top-2 5G-chip suppliers, snatch up 4% of the world’s market for 5G intellectual property, and bag a half of the world’s market for small cell towers in six years.

Also, the government will put aside NT$4.5-6 billion (US$150-200 million) of the proceeds from the auctions of 4G licenses to finance the development of 4G and 5G service applications.

The South Korean government has more aggressive goals for its 5G industry, aiming to commercialize the service in 2020 after the scheduled 2017 trial service.

5G technology beams data almost 1,000 times faster than 4G on the Internet, allowing end users to download an 800-megabyte file in only one second on computing device vs. 40 seconds achieved by 4G technology. Such high speed of wireless connection will facilitate South Korean enterprises in winning business overseas.

South Korea’s Ministry of Science and Technology said  that now is the time for South Korea to lead other nations to develop 5G when Europe, China and the United States are vigorously developing the technology because competition in the market will intensify in a few years. It said that to foster the country’s economic growth the government established 2G service in 1990s, 3G service in 2000s, and 4G service in around 2010.

The South Korean government estimated that between 2020 and 2026 5G-related industries in the country will ship around 331 trillion won (US$308 billion) worth of equipment globally. The government even plans to help the country’s telecom-equipment suppliers expand their share of global market for infrastructure equipment to 20% by 2026 from the current 4.4% by taking advantage of its 5G advances.

Taiwan’s industry executives point out that in the past the South Korean government has strategically financed LG and Samsung, two of the nation’s iconic enterprises, in the development of their semiconductor, IC design, flat panel, and smartphone technologies, setting up direct threats to Taiwan’s manufacturers in these sectors on global markets.

According to the Taiwan government, in 2012 Samsung spent around US$10.3 billion on R&D, much more than the total spent by Taiwan’s HTC Corp. (US$520 million), MeidaTek Inc. (US$440 million), Hon Hai Precision Industry Co., Ltd. (US$383 million), Asustek Computer Inc. (US$290 million), and Acer Inc. (US$100 million).

In the global competition of 5G IP, South Korean manufacturers have far outperformed Taiwan’s competitors, illustrated by LG’s 438 patents and Samsung’s 203 patents vs. the total 21 of  Taiwan’s Industrial Technology Research Institute (ITRI), MediaTek, HTC, Institute for Information Industry (III), the National Chiao Tung University, and Acer. (KL)