Tag: korea

Korean FTC rakes in record fines

Korea’s Fair Trade Commission collected a record number of fines against companies accused of price fixing, in the first 11 months of 2011.

Companies were made to pay back a total of $923 million (1 trillion won), exceeding the commissions’ expectations of $372.3 million (402.9 billion won). The sum was larger as a result of several large scale investigations.

Price fixing has increased in Korea as firms search for ways to make bigger profits. This year alone, Hitachi, HP and AUO have been fined for allegedly jumping into bed with their friends and manipulating LCD and other technology prices.  

As a result of such cases, the FTC made $179 million ($194 billion won) in fines from LCD panel makers and other technologies.

Other cases that raked in the cash were three local instant noodle makers who
were found to have cooked up plans for nine years to match product prices, while eight construction companies were fined after an investigation on collusion to win deals for the four rivers restoration project.

The Korean FTC’s record fine earnings comes months after it was criticised by parties who claimed it should not be given the exclusive right to decide if companies should face investigation for antitrust activities.

The watchdog was criticised after a series of lenient decisions made by the organisation, which saw its critics allege that it seemed more eager to protect businesses than victims of unfair treatment.

Korean FTC slaps LG with paltry fine

The Korean Fair Trade Commission has used its powers to fine billion dollar company LG  a huge fine of… $74,300 (85 million won).

The paltry penalty, for obstructing the FTC investigation into claims of unfair pricing practices in March,  is sure to make the billion dollar company quake in its boots.

LG has also been reprimanded for secretly moving its memory drives when investigators demanded that the door be opened.

Another manager at the company has also been accused of deleting files on his external drive after FTC agents ordered him not to do so, the Joongang Daily reported.

The watchdog began investigating the company after smaller retailers asked it to check if the company was providing its products at different prices.

However, many will be unimpressed at its lack of backbone issuing such a small fine.

Earlier this week critics hit out at the watchdog for being “too lenient”  and this latest incident isn’t compelling evidence to the contrary.

LG has somewhat become a favourite with the watchdog. In 2009 LG was let off the hook when it was investigated and found guilty of fixing the prices of home appliances between 2008 and 2009.

Critics claimed that the regulator’s leniency program meant that LG was exempted from the fine of $16 million (18.83 billion won).

Up until 2000, the FTC filed a complaint against two percent of the total cases detected.

However, this figure had dropped to 0.95 percent over the past 10 years even though the annual number of cases the agency handled had increased five- to six-fold during the same period.

Of the 3,505 cases the FTC detected in 2010, the agency filed a complaint in only 19 cases. In 1,763 cases, the agency ended up issuing a warning.

Foundry giant TSMC "too big to fail"

TSMC has become “too big to fail”, according to semiconductor analyst house Future Horizons, effectively contributing to around two percent of the total world GDP.

Future Horizons’ principal analyst Malcolm Penn said at the IFS2012 event in London that the sheer size of the Taiwanese company lends it some impressive comparisons.

“TSMC is controlling about two percent of the world’s GDP,  that makes them bigger than Korea as a country,” he said. “It is a huge concentration of power.”

However, this means that all of the fabless firms which do business with TSMC have firmly put their eggs in one basket, and this is potentially dangerous for the industry as a whole.

“You think that this really is now too big to fail,”  Penn said, adding that there is a “huge amount of responsibility” linked to this level of dependence on one firm, even if it is one that he describes as “one of the finest companies in the world”.

With the semiconductor industry the basis for other markets, including in electronics, automotive and industrial applications, not to mention a range of service providers such as telecoms and ISPs, the power that TSMC wields is staggering.

In terms of the semi industry alone, TSMC’s means that it accounts for nearly 60 percent of chip production at the 28nm process.

With the popularity of fabless companies, the idea that TSMC could fail is almost unthinkable, supporting the likes of Qualcomm, Marvell, MediaTek, Nvidia and countless others, along with fablite firms as well. Disruption to its production could cause great upheaval in the supply chain.

According to IHS iSuppli, there are more than 150 fabless semi companies which use foundry services, contributing to $30 billion in annual revenues.   

TSMC accounts for the lion’s share of this business, with much of it centred around Taiwan, and along with UMC, the country makes up 67 percent of the world’s foundry production and 24 percent of total semi production.

The area is also susceptible to natural disasters, and while TSMC remained relatively unscathed from the tragic events of the tsunami in Japan, earthquakes have  disrupted supply in the past.

Whether the chip industry could weather the storm of any sort of disruption to a firm deemed “too big to fail” would seriously test the strength of the industry and almost all of the supply chain reliant on the fabless approach.

Worldwide chips sales down three percent

World chip sales are expected to drop three percent during May, as analysts predict flat growth for the year.

According to figures from Carnegie, chip sales across the globe are expected to be $24.2 billion in May.  This means that chip sales have fallen slightly from the same period last year, looking at a three month average.

It is expected that growth in the industry will be kept flat during 2012, with a solid increase expected for next year.

Apparently chips for mobile handsets were an area that weakened in May, following a particularly strong outing in April.

Analysts say that production in Japan for chips dropped during May, and this could continue, with Renesas set to close off capacity later in the year.

In Korea meanwhile chip exports were stronger during May, with Japan shipping out only 77 percent as many chips as its neighbour during the month.

This compares with 2001 when Japan was shipping twice as many chips, or way back in 1994 when exports were three times higher.

Hon Hai's Terry Gou to win Prince Philip Award for racial harmony

Hon Hai chairman Terry Gou is a cert to win the TechEye Prince Philip award for racial harmony after his latest gaff attacking the Koreans.

Gou, who famously described his control over employees as being similar to a zoo keeper, and publicly pondered what was so bad about running a sweatshop, has been caught slagging off Koreans.

According to Focus Taiwan, Gou confirmed a joint venture deal with Japan’s Sharp when he mentioned that he preferred working with the Japanese.

“I respect the Japanese and especially like their execution and communication styles,” Gou said. “Unlike the Koreans, they will not hit you from behind.”

Given that Japanese executions used to involve a sword to the back of the neck we are not sure where he got this perception from. True, when Japan invaded China they were pretty upfront about it, and did not shoot people from behind, but that was a long time ago. China has not forgiven Japan for its massacres, but then Japan has not exactly said sorry either. 

We understand that Gou might not like Koreans because of the success of Samsung, however, we should point out that not all Koreans work for that company.  Those who do have not felt the need to jump off buildings either.  

Samsung to build $1.9 billion logic chip plant

Samsung plans to spend $1.9 billion on a new chip plant in Korea. 

The plant will churn out mobile processors to meet growing demand for tablets and smartphones.

The new line will use 300mm wafer and 20nm and 14nm production technology, Reuters reports.

At the moment Samsung’s most advanced Exynos chips, like the Exynos 4 quad of Galaxy S III fame, rely on the 32nm process. Even the upcoming Exynos 5 dual, based on ARM’s next generation A15 core will stick to 32nm.

Samsung recently announced plans to construct a massive NAND plant in mainland China, at a purported cost of between $3.4 and $4.2 billion.


Sony market value slumps to lowest since release of Walkman

Sony has seen its shares drop to the lowest level since 1980 as TV sales continue to decimate its market value.

Sony’s shares fell to below 1,000 yen in Tokyo trading for the first time since the release of its Walkman, which saw the firm on its ascension to world domination.

The outlook now is somewhat bleaker, and with shares falling to 996 yen on the Tokyo Stock Exchange, declining past the level last seen on 1 August 1980, according to data put together by Bloomberg.

Japanese electronics firms have been enduring hardships with the tsunami last year, while the yen currency continues to get stronger, making life difficult for the likes of Sony, Panasonic and Sharp.

One of the main challenges facing Sony and its domestic rivals is the slump in TV sales. Sony posted a $5.7 billion yearly loss in March, with slow flat screen sales a major contributing factor.  

This has coincided with the ascent of the Korean giants like Samsung, and the picture continues to stay bleak for Sony as it attempts to turn its business around. 

Analysts recently told TechEye that it may have to accept that the game is up in the telly business as it gets outmuscled by overseas rivals.

With Sony’s TV business posting losses for the past nine years, and its overall business in the red for the past four, the Japanese firm has some tough decisions ahead if it is to stop its value declining even further.

Sony and Panasonic to team up on OLED

Sony and Panasonic are wining and dining each other’s executives with the aim of developing the technology to mass produce next-generation OLED televisions.

The pair want to compete with South Korean rivals in the technology which will kill off current LCD TVs.

According to Reuters, the cunning plan will take on a similar alliance between Samsung and LG to sell 55-inch OLED televisions, which can be as slim as 4 millimetres, consume less power and offer sharper images.

Sony and Panasonic have to share organic light emitting diode (OLED) technologies to take on Samsung and LG.

Kyoko Ishii, senior coordinator of global corporate PR for Panasonic, is refusing to confirm any deal. He said that Panasonic will continue its development and verification of OLED based on the result of research the company has been doing at its laboratories.

It has not even thought when it would try to commercialise the technology yet, Ishii claimed.

Sony, which created the the world’s first OLED TV in 2007, halted production of the $2,000 screens three years later because of the global downturn.

Currently Sony makes OLED screens costing as much as $26,000 for high-end customers. Needless to say it is not saying anything about the rumours either.

It has been predicted that shipments of OLED TVs may grow to 2.1 million sets in 2015 from just 34,000 this year, according to research firm IHS. 

Samsung stamps down on smokers

Samsung is considering making its workplaces non-smoking areas.

The company may have a fight on its hands with as one source put it to TechEye: Most of the Samsung execs “smoke like chimneys”.

The Korean giant has said it may begin to reward non-smoking entry-level job applicants extra marks, which could give them the potential to land a job with the company.

According to the Joongang Daily, the moves are a way to “promote a nonsmoking culture at the workplace to a level in other developed economies,”

It quoted a Samsung spokesman as claiming: “Good health conditions of employees is the top competitive edge of the firm.”

Not only will smokers have trouble getting their CVs through the door, Samsung is also considering testing new recruits’ urine and hair samples.

Samsung sent out an internal email earlier this month to employees at its device-solution division informing them that smokers will be discriminated against when it came to executive promotions. It has also decided to target its workers and garnered the signatures of 35,000 smoking employees pledging to quit.  

Last year, its Suwon operation was also designated as a “mandatory smoke-free zone.”

Ex-Samsung worker wins industrial accident claim

A former Samsung employee has won a case against the company after Korea’s workers’ compensation agency acknowledged industrial accident status.

The 37 year old retired worker,known only as “Kim”, developed a disease known as aplastic anemia, which she blamed on the four year working conditions at the company’s semiconductor plants.

Aplastic anemia is a condition in which bone marrow does not produce sufficient new cells to replenish blood cells. Some medics believe that the disease could be related to exposure with toxins such as benzene.

Kim complained to Korea Workers’ Compensation and Welfare Service, which approved the  industrial accident status.

However, the ruling is more than a triumph over the company. According to the Korea Joongang Daily, it is also the first time that the Korea Workers’ Compensation and Welfare Service acknowledged an industrial accident.

Since 2007 it has rejected 18 similar claims by former Samsung employees, and currently reviewing three.

“There is the likelihood that Kim was indirectly exposed to organic solvents that included benzene,” the agency said in a statement.

It said that analysing Kim’s blood at the time of her retirement, found there were already symptoms that showed anemia and a decrease in blood cells.

Kim worked for a year at Samsung’s Giheung plant in Gyeonggi and four years and five months at the company’s factory in Onyang, South Chungcheong.