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Tag: Korea

  • GM Korea votes to spin off R&D unit

    GM Korea votes to spin off R&D unit

    A GM Korea shareholders’ meeting Friday decided to spin off its R&D and design department, reigniting conflict with its labor union and the state-owned Korea Development Bank (KDB), the automaker’s second-largest stakeholder.  “The plan to establish a dedicated engineering unit, GM Technical Center Korea, was approved during the shareholders meeting,” GM Korea said in a statement.

    However, the decision is guaranteed to be controversial since KDB, which owns 17-percent of GM Korea, intended to vote against the spinning off of R&D and design unit from production but missed the shareholders’ meeting.

    “We received notification of the shareholders’ meeting, but the decision was made in our absence,” an official at the KDB bank said. “We were not able to exercise our veto rights since we weren’t there.”

    GM Korea’s unionized workers occupy the hallway leading to the GM Korea chief executive’s office at the company’s headquarters in Bupyeong District, Incheon, on Friday in an effort to stop a shareholders’ meeting from taking place

    It’s not clear why KDB representatives didn’t attend. KDB said it will be looking into the legality of the meeting.

    On Thursday, KDB released a statement saying it would ask GM Korea’s management to explain fully its decision to spin off the R&D and design center and decide whether to exercise its veto rights.

    The statement was released after a court in Incheon rejected KDB’s request for an injunction to stop the shareholders’ meeting.

    “Although we respect the judgment of the Incheon court, we have deep concerns about GM Korea’s push to spin off [R&D and design] without sufficient explanation or agreement from the interested parties during the shareholders’ meeting,” the bank said in the statement.

    GM Korea’s union claims the spin-off is the first step in a long-term plan to completely halt domestic production.

    KDB has the right to nullify any GM Korea decision to sell more than 20 percent of its total assets, which is supposed to prevent the U.S. automaker from pulling out of Korea or restructuring without the consent of the bank.

    That right, which expired in October 2017, was reinstated after GM and the Korean government reached an agreement in April.

    However, it’s not clear whether that veto right can be applied to spinning off units within GM Korea. There’s even arguments that the newly forming center may not account for 20 percent of the automaker’s total assets.

    The union tried to stop the shareholders’ meeting by occupying a hall leading to GM Korea CEO Kaher Kazem’s office in Bupyeong District, Incheon. The union earlier this week voted in favor of a walkout that will likely take place next week.

    A crisis that led to the shutdown of one of GM Korea’s four plants in Korea in May seemed to have been solved when GM and the Korean government reached an agreement after long negotiations to inject $7.15 billion into the struggling automaker. GM agreed on covering $6.4 billion while KDB put up $750 million. GM agreed to keep the local unit going for at least 10 years.

    But in July, GM Korea announced the spinning off of its R&D center, which will turn Korea into its global strategic development and design center for next generation models.

    Meanwhile, production of compact vehicles will end in 2022 and factories will concentrate on SUVs.

    “The establishment of a dedicated GM Korea Technical Center is an important development in continuing our organization,” said GM Korea CEO Kazem in a letter sent to employees on Monday, adding that the new center would help to “more effectively respond to and secure and execute global engineering projects.”

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  • SK Group continues to focus on social value

    SK Group continues to focus on social value

    SK Group is reevaluating its business models in a bid to ensure that all of its affiliates create social value along with economic value. SK Chairman Chey Tae-won and the heads of all SK affiliates discussed ways to renew their business models so that doing business leads to increasing benefits for the public as well as SK shareholders and employees during a three-day meeting on Jeju Island that ended Friday.

    “Creating social value is a way to earn strong trust from our customers and society,” Chey said. “By social value, I mean increasing the benefits of all stakeholders in our business including our customers, shareholders and employees.”

    Chey then ordered the chief executives to think over whether there was any part of their business that they are tricked into believing is sustainable.

    “Rethinking business models that you believe are sustainable is the beginning of a deep change that we are trying to accomplish,” the chairman added.

    SK has been making small steps into realizing Chey’s vision from earlier this year. The group’s oil refining arm SK Energy opened up the idle space at its gas stations so a logistics start-up can move in and use the space as storage.

    However, many other SK affiliates still need to come up with ideas to create social value.

    To renew business models, the CEOs agreed that sharing data and resources between SK affiliates is crucial. The heads also said that all members of SK should be a part of the movement for the vision to materialize.

    The chief executives first decided to improve human resources management policies and the research and development system. Details of the discussion weren’t revealed, but Chey ordered the chief executives to rethink the work environment for employees and to bolster R&D capabilities.

    As SK has businesses in a range of industries, the group is also thinking about business convergence among affiliates.

  • KT’s Kids’ Land is now available on the move

    KT’s Kids’ Land is now available on the move

    KT’s Kids’ Land will soon be available on the move, as the mobile carrier tries to take on YouTube Kids by moving its popular child-friendly content service to smartphones.
    Kids’ Land, which launched in May on KT’s internet-protocol TVs, is now used by 3.6 million customers, according to KT. By creating a mobile app that is connected with the IPTV, the carrier said that kids will now be able to enjoy their favorite content anywhere they want.

    New content was also been added to the service, now upgraded to Kids’ Land 2.0, on Tuesday. While most of the content on the original Kids’ Land was for children, the new version comes with new videos dedicated to parenting, made for KT in cooperation with Dr. Oh Eun-young, a famous figure in the field of child care in Korea.

    Oh’s content will cover 10 big topics in parenting, spanning about 50 video clips, so that parents can easily learn how to behave with their children in specific situations, like when they won’t sleep.

    “There is so much, in fact, too much information on parenting that parents these days can’t really tell between reliable content and those that are not,” Oh said. “KT’s platform offers curated and reliable content that parents can always turn to.”

    Kang In-sik, vice president of the media content department at KT, said KT will be working to provide more original content to beat competition from other platform providers like YouTube. KT is currently contacting experts to make videos specifically targeting infants as well as the elderly and those hoping to learn a new language.

    The new Kids’ Land app will be ad-free and filter out harmful content for children.

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  • Kakao starts carpool recruitment

    Kakao starts carpool recruitment

    Kakao Mobility has opened recruitment for its carpool app, infuriating taxi drivers who are vehemently opposed to the move. According to the mobility company that operates taxi-hailing app Kakao T, recruiting drivers is one of the crucial steps in preparation for the launch of its carpool service. The hiring process opened on Tuesday with the launch of a driver registration app, dubbed Kakao T Carpool for crews.

    Kakao Mobility was quick to point out that recruitment does not mean it will immediately launch a carpool app, adding that there is no set date for release. Instead, Kakao is looking to move drivers registered on Luxi to the new Kakao app, although this process will mean that it has a pool of drivers readily available, allowing it to immediately launch the app whenever it wants.

    Kakao Mobility has actually been attempting to launch its own carpool service since it acquired Luxi for 25.2 billion won ($22.4 million) in February. At the time, the company made it clear that it would only use the carpool service to cover shortages in taxis during peak hours, “within the legal boundaries.”

    Kakao’s statement did little to appease taxi drivers back in February, and they’re not any happier with the service now. Korea’s taxi drivers are fiercely opposed to ride-sharing apps, which they consider an unlicensed threat to business.

    This is the main reason why popular international ride-hailing companies like Uber are illegal in Korea under Article 81 of the Passenger Transport Service Act, which says that personal vehicles cannot be exploited for business purposes.

    Carpooling services, however, have been operating by taking advantage of a loophole that says that carpooling during commuting hours is permitted. Still, the vagueness of the term “commuting hours” has caused conflicts between carpool service providers and taxi drivers.

    Taxi drivers argue that Kakao is taking work away from them. As Kakao operates Kakao T, which thousands of taxi drivers rely on for work, the feeling of betrayal is even stronger.

    “It feels as if we are being backstabbed by Kakao, who we have been thinking of as a business partner,” said a spokesperson from the Korea National Joint Conference of Taxi Association, a group representing over 100,000 corporate taxi drivers nationwide, in a phone call Tuesday. “I can’t believe Kakao is making this announcement without delivering any message to drivers who have been holding a series of rallies against the company’s plan to start the carpool business.”

    The drivers held two rallies in Pangyo, Gyeonggi, where the Kakao Mobility office is located, on Oct. 4 and 11. About 500 people gathered at the second rally from four taxi driver unions, including the Korea National Joint Conference of Taxi Association. Tomorrow, a bigger protest is due to take place in Gwanghwamun Square in central Seoul at 2 p.m.

    To participate in tomorrow’s rally, about 4,000 drivers from Incheon, about half the city’s taxis, are expected to walk out, according to Incheon’s taxi association. About 2,000 taxis in Jeonju, the capital city of North Jeolla, are also due to stop operations for the rally, according to the city’s government.

    Some other cities are also facing similar problems as taxi drivers say they will leave for the rally.

    Despite the controversy, Kakao Mobility maintained Tuesday that carpool apps could be a great complementary service for taxis, citing data that on Sept. 20 there were 205,000 calls for taxis on the Kakao app from 8 a.m. to 9 a.m., but only 37,000 taxis were available.

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  • Spotlight on ASEAN for Korean retail, beauty and entertainment biz

    Spotlight on ASEAN for Korean retail, beauty and entertainment biz

    With Southeast Asia becoming the center stage for South Korean businesses in expanding their global presence, retail conglomerates like Lotte, Shinsegae and CJ have been successfully tapping into the markets. Lotte Group has focused its investments on its retail arm Lotte Shopping’s entrance to the Indonesian market. According to the company, the Indonesia market accounts for 17 percent of total sales earned from overseas Lotte Group businesses.

    Lotte Mart, a discount chain operated by Lotte Shopping, currently runs 46 stores in 25 cities in Indonesia. These stores raked in 1.1 trillion won (US$971 million) in sales as of the end of last year.

    By 2020, the company aims to open 36 more stores in 10 additional Indonesia cities.

    Following a successful entrance in the Indonesian market, Lotte Shopping now targets large-scale investment in Vietnam.

    The company will inject 330 billion won to complete the construction of Lotte Mall Hanoi by 2020.

    Shinsegae Group has been also speeding up its expansion into countries in the Southeast Asia.

    In 2015, Shinsegae’s discount chain operator E-mart opened a two-story mall located in the heart of Ho Chi Minh City at Go Vap District, one of the most developed and densely populated areas in the capital.

    The Go Vap branch marks E-mart’s first overseas store since the brand redirected its focus to the Southeast Asian market in 2011 after officially exiting the Chinese market.

    For over the next three years, E-mart will invest 549 billion won to open four more stores in Vietnam by 2020.

    The second outlet in Ho Chi Minh will open in the first half of next year, the group said.

    Singapore is another crucial country — geographically and economically — for the groups.

    SPC Group opened the first Paris Baguette store in Singapore in 2012. Now nine outlets are operated there, including one at Changi Airport.

    The group said its Singaporean branch Paris Baguette Singapore PTE marked a 12 percent increase in sales from 12.9 billion won in 2015 to 14.4 billion won in 2016.

    SPC Group said it has taken care to localize its services as much as possible to meet the needs and lifestyle of Singaporean consumers.

    Entertainment businesses have also penetrated Southeast Asian markets.

    CJ ENM, a merged corporation of CJ O Shopping and CJ E&M that officially launched in July, will open Asia’s largest virtual commerce content production center in Ho Chi Minh City, Vietnam, targeting audiences in Southeast Asian countries.

    The center, called DADA Studio Vietnam, will create and distribute at least 1,000 pieces of virtual commerce content from early next year.

    Focusing on making use of the low-cost production system and high efficiency of the talent pool in Vietnam, CJ ENM said its attempt to operate a content hub abroad would lead to boosted content sales from the global market.

    “CJ O Shopping and CJ E&M had already witnessed the possibility of the v-commerce content business through our DADA Studio and online creators’ platform DIA TV. To dominate the expanding global content market, a merger of the two CJ companies will show the synergized effect of CJ’s digital content and channel operation,” said Kim Do-han, a director at CJ O Shopping.

    Following the K-pop boom and popularity of Korean style makeup trends, Amorepacific opened an outlet of its high-end makeup and skin care brand Hera this year at the Takashimaya Department store in the heart of Singapore’s shopping district.

    “Targeting the Singaporean market is important with the K-pop and Korean culture wave’s sensational influence to surrounding countries. Hera’s trendy brand image will suit well with Singapore consumers’ taste,” said Na Jung-kyun, head of Amorepacific’s Southeast Asian region division.

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  • Lotte Duty Free’s expanded flagship Seoul store with focus on K brand

    Lotte Duty Free’s expanded flagship Seoul store with focus on K brand

    Lotte Duty Free has opened a new 519 square meters area at its flagship store in Myeong-dong, Seoul, with a strong emphasis on promoting small and medium-sized Korean brands. A highlight of the zone, located in the store’s Star Avenue, is ‘Blooming Beauty’, a shop-in-shop that houses around 130 brands, 60 of them small, emerging brands and 30 of them independently owned. These include the Marvel collection from The Face Shop, Medicube, Miba, Cosmetea, Wakemake and others.

    The company said it was “upgrading its incubation programme” for smaller brands, and would support them by distribution through its online sales channel and at its downtown Seoul outlets.

    It said that these brands would “demonstrate their sales potential” in the new environment.

    The store, it added, “will enhance customer convenience through brand diversification and space expansion”.

    To celebrate the opening of the new Star Avenue area, Lotte Duty Free presented gifts from 20 brand partners in the Blooming Beauty zone to shoppers who spent more than US$1.

    There are also special discounts for local residents until the end of October, and discounted sales of KT&G’s new ‘heat not burn’ product Lil will be available until 22 November.

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  • South Korea’s Diet Plan Company Launched

    South Korea’s Diet Plan Company Launched

    GLAM.D, healthy diet brand from South Korea, has launched three products in Singapore exclusively at Guardian. With the festive season approaching, it’s the time for feasting on Christmas goodies and even Chinese New Year treats. Amidst all that glorious food, GLAM.D drinks will come in handy so you can still look fabulous in your party outfit.

    The carb-blocking Weight Loss Drinks range includes lemon-flavored Easy Slim ($31 for box of 15), that is refreshing and easy to drink on a hot day, while the coffee-flavored Glam Café Original ($35 for box of 30) is perfect for coffee lovers.

    Both contain a key ingredient, Garcinia Cambogia Extract. Effective in blocking dietary carbohydrates from converting into body fat, they are suitable for the carb-heavy Singaporean diet.

    For snacking alternative, at only just 5 calories, maintain your daily calorie limits with water jelly treats from the Low Calorie Line. The 5Kcal Water Jelly ($3, available in apple, peach and mango flavours) drink contains fruit purée and natural sweeteners and is bursting with delicious fruity flavor.

    GLAM.D is available at over 50 Guardian stores islandwide, including Takashimaya, NEX, Jurong Point and Tampines Mall, as well as via Guardian SG Online.

     

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  • Online printing startup Gogoprint raises $7.7m to prepare new markets

    Online printing startup Gogoprint raises $7.7m to prepare new markets

    Gogoprint, a startup that’s modernizing the printing industry, has raised US$7.7 million in series A funding to fuel its expansion into new markets like Australia, New Zealand, and South Korea in the next 12 months.

    Gogoprint is an online service for printing things like business cards, flyers, and leaflets. It uses algorithms that take into account parameters such as paper type, quantity, and delivery, and then aggregates those orders into a “print-run” or a batch of prints.

    This enables printers to make the most out of one printing sheet. Because each sheet carries fixed costs, maximizing it helps reduce prices and turnaround time for customers. It also allows printers to take in small orders from budget-conscious firms, instead of only focusing on large volume orders.

    Printers that partner with the company are able to tap new customers, helping offset the cost of any unused capacity.

    Gogoprint is active in four countries: Thailand, where it started, as well as Singapore, Malaysia, and Indonesia. In Indonesia, it faces competition from another online printing startup, Prinzio.

    To date, Gogoprint has experienced a 200 percent year-on-year growth in customer base, attracting more than 45,000 customers with over 250 million products printed. Its clients include Honda, Lazada, Lion Air, Yamaha, Singapore’s Nanyang Technological University, and Booking.com.

    Retail News reached out to the company for more financial details, but it declined to disclose figures.

    The series A round was led by its existing backer OPG (Online Printing Group), an investor and partner of Brazil-based Printi.

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  • Korea’s Skinfood getting close to bankruptcy

    Korea’s Skinfood getting close to bankruptcy

    South Korean cosmetics firm Skinfood has filed for court receivership after increasing financial losses.

    The company’s former popularity of a decade ago was hit by the 2015 Middle East Respiratory Syndrome (MERS) outbreak and diplomatic disputes between Seoul and Beijing, both events affecting the brand’s core overseas markets.

    A company spokesperson said: “We are having temporary difficulty in securing liquidity due to excessive debt. We sought the court restructuring as we thought settling the debt and promptly normalising management will benefit everyone, including the creditors.”

    The company has plans to sell off some of its overseas business rights and expand its online channels to improve its standing.

    Skinfood’s sales reached KRW126.9 billion (US$111.96 million) last year, a drop of 25 per cent from the year previous, with an operating loss of KRW98 billion ($86.46 million).

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  • KT expands reach of AI-powered smart city solution to SEA

    KT expands reach of AI-powered smart city solution to SEA

    South Korea’s KT has announced plans to expand the reach of its self-developed AI technology with the launch of services for hotels and smart cities in Southeast Asia.

    The operator will introduce customized AI solutions for the market, starting with Vietnam.

    KT last month entered an agreement with Vietnam’s largest construction company Hoa Binh Construction Group (HBC) JVC for the provision of AI-powered hotel and apartment services in Southeast Asia. The partners have also agreed to subsequently co-operate on smart building and city projects in major metros in the region.

    KT used its platform to launch the first hotel in South Korea to offer AI-assisted room services in July – a Novotel Ambassador hotel in Seoul – and plans to open three more smart hotels across Seoul by 2020.

    The company’s hotel AI service platform is a customization of KT’s GiGA Genie AI powered smart home media hub, which launched in 2017 and now has more than 1 million subscribers in South Korea.

    “It’s a big first step for KT’s AI platform to reach out to the world, thanks to the partnership with HBC,” KT marketing group senior vice president Lee Pil-Jai said. “With great success in South Korea, we will step up efforts to localize our AI hotel service and smart city solutions for Southeast Asia and beyond.”

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  • Naver unveils cutting-edge location tech for smarter mobility

    Naver unveils cutting-edge location tech for smarter mobility

    From indoor navigation using augmented reality to ultra-high definition mapping technology for autonomous driving, South Korean internet giant Naver is developing a range of location-tracking technologies it believes will form the backbone of new offline services in the future.

    Some of these technologies were unveiled Thursday at Naver’s annual developer’s conference Deview 2018 held in Seoul, organized to showcase the Korean portal site operator’s future tech development direction each year.

    Stressing “location” as the most important cue for context in a physical space, Naver Chief Technology Officer Song Chang-hyun said Naver’s in-house research lab is developing and testing out an array of location and mobility-based technologies that will serve as the backbone of new, real-world services
    “If technology can fix mobility problems in the physical space, it will inevitably lead to the development of new services. And the underlying platform technology for any location and mobility problem is mapping,” Song said in a keynote speech during the conference.

    In line with this vision, Naver plans to open source the Naver Maps Enterprise application programming interface to developers next month. The soon-to-be-free mapping API includes including point of interest data and navigation data, which most smaller ICT firms find difficult to build and maintain.

    The Korean internet giant also introduced for the first time the eXtended Definition & Dimension Map, or xDM, platform which includes high-dimension mapping, localization and navigation technologies to guide people and self-driving vehicles in not just outdoor, but also indoor settings.

    For instance, Naver utilized its xDM platform to build an AR navigation system that guides people through indoor spaces without GPS access, using just a smartphone camera. On a smartphone, walking direction signs and messages would be overlaid on top of real-life pathways as captured by the camera.

    The company also showcased the latest updates in its robotics technology development, which had taken center stage at last year’s Deview conference.
    This service is slated to debut soon, via a partnership with Incheon Airport. This week, Naver signed a memorandum of understanding with the airport’s operator to launch an indoor AR navigation app that would guide airport passengers to their respective destinations inside the airport.

    “We plan to open source our xDM platform in the form of API and SDK so that they can be used for various location-based service development and mobility research in the future. We plan to continue improving xDM so it can grow into Korea’s top location and mobility platform,” Song said.

    In addition, Naver Labs is developing technologies for self-driving cars, including a high-definition map that combines high-definition aerial maps and mobile mapping devices to build intricate, real-time maps even in crowded urban centers where GPS access is partly blocked out.

    M1, an autonomous indoor mapping robot that creates intricate 3D maps while moving by laser-scanning its surroundings with a 360-degree camera, and Around, a self-driving robot that navigates itself by accessing M1’s mapping data via the cloud, are undergoing commercialization procedures via a partnership with Hyundai Heavy Industries Holdings.

    Aircart, an electric book cart equipped with a module that amplifies human power to make pushing the cart significantly easier, is preparing for commercial deployment at local libraries in partnership with Samsong Caster.

    Naver’s robotics lab is also continuing research and development efforts with Seoul-based Korea Tech Co. to develop robotic cable-driven arms with humanlike sensitivities called Ambidex. Weighing just 2.6 kilograms, the robot’s core motors are placed near the torque and transfers power down to the lower arms and fingers via flexible, lightweight cable wires.

    Looking ahead, Naver plans to showcase its fleet of robots at the Consumer Electronics Show in Las Vegas in January next year, marking its first-ever attendance at the global electronics conventio

  • Philip Morris to begin selling Korean-made heated tobacco unit

    Philip Morris to begin selling Korean-made heated tobacco unit

    Philip Morris Korea Inc. said Thursday that it will begin selling its tobacco sticks, called Heets, produced at its factory in South Korea later this month.

    To this point, Philip Morris Korea imported Heets for sale in South Korea.

    Philip Morris Korea has expanded its production facility in Yangsan, the first facility in Asia to manufacture heated tobacco units for its tobacco heating device IQOS. Yangsan is a city located about 420 kilometers southeast of Seoul.

    The share of Heets, tobacco sticks exclusively for IQOS, was reported at 8.1 percent of South Korea’s total tobacco market in August.

  • Lotte’s Shin returns to work after early release

    Lotte’s Shin returns to work after early release

    Lotte Group Chairman Shin Dong-bin returned to the office on Monday, getting back to work immediately to resolve issues that were put on hold while he was imprisoned until Oct. 5.

    Shin was spotted heading to his office on the 18th floor of Lotte World Tower in Songpa District, southern Seoul, Monday morning without responding to questions from reporters.

    The 62-year-old Lotte head’s return to work comes just eight months after he was sentenced to 30 months in prison in February for bribing former President Park Geun-hye. On Friday, the Seoul High Court replaced the prison sentence with four years of probation.

    On his first day back, Shin was scheduled to meet with top executives for business updates, including heads of Lotte Group’s four main business units and Vice Chairman Hwang Kag-gyu, who was the de facto leader of the conglomerate during Shin’s vacancy.

    “We plan to speed up examinations of business agendas that were put on hold in order to normalize the company’s management,” a Lotte spokesman said.

    Shin was a core decision maker for multiple large-scale projects inside the group, and his imprisonment put a halt on many of those plans. Earlier this year, Lotte was looking into investing a total of 11 trillion won ($9.6 billion) in domestic and foreign companies, but the decisions had to be postponed.

    Among the large-scale construction projects waiting to restart is Lotte Chemical’s massive oil complex in Indonesia, in which the company planned to invest 4 trillion won by 2023. This was the largest ongoing investment when Shin was detained in February. Lotte finalized procedures in purchasing land for the site last year, but its construction was indefinitely postponed.

    Another problem left to untangle is the Lotte World project in Shenyang, China. The ambitious 3-trillion-won plan to build a mall, theme park, hotel and residencies inside one complex was stopped during construction by Chinese officials in November 2016. The apparent reason was safety violations, but it was thought to be part of unofficial sanctions on Lotte for having approved a land swap with the then-government for the deployment of the U.S.-led Thaad antimissile system.

    Lotte’s organizational reform also has a chance of moving forward now that Shin is back in control as he can mediate between Korean and Japanese shareholders. Since 2016, Shin has led efforts to cut cross-shareholding among affiliates and rearrange them under Lotte Corporation, a Korean holding company.

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  • Samsung sets quarterly profit, revenue records

    Samsung sets quarterly profit, revenue records

    Samsung Electronics once again set quarterly records for profit and revenue thanks to high demand for the semiconductor chips needed to propel today’s key technologies.

    However, Korea’s biggest company is facing challenges as its current portfolio is heavily dependent on computer chip sales. Its smartphone business is struggling as sales of its flagship Galaxy S9 smartphone sales failed to reach expectations.

    According to Samsung Electronics’ guidance report on third-quarter performance, released on Friday, the company’s revenue grew 4.7 percent compared to a year ago to 65 trillion won ($57.5 billion) while its operating profit expanded by 20.4 percent to 17.5 trillion won. It is a new record for both quarterly revenue and operating profit. The earlier market consensus on Samsung Electronics’ operating profit was between 16.8 trillion won and 17.1 trillion won. Compared to the previous quarter, revenue was up 11.1 percent and operating profit was up 17.7 percent.

    Although the guidance report did not give details on the earning performance of each business, market experts believe the company’s record-breaking performance was due to the company’s semiconductors.

    Brokerage firms estimated that Samsung Electronics made roughly 25 trillion won in revenue in semiconductors in the third quarter, up 24 percent from last year’s 19.9 trillion won.

    The operating profit of the memory business is estimated to have increased by 36 percent to 13 trillion won, which would be an all-time record.

    DRAM revenue is believed to have surged 47 percent year-on-year to around 14 trillion won while NAND flash was up more than 8 percent during the same period to 7 trillion won.

    “The recent starting of additional production line manufacturing DRAM and NAND flash of the company’s memory plant in Pyeongtaek, Gyeonggi, is said to have contributed to the robust sales of the company’s memory chips,” said Doh Hyun-woo, NH Investment & Securities analyst.

    The company’s display business is estimated to have improved sharply in the third quarter as well, contributed by Apple’s release of the latest iPhone, equipped with organic light-emitting diode (OLED) display, in September.

    While the liquid-crystal display (LCD) business revenue is estimated to have dropped 28 percent, OLED business is estimated to have increased 35 percent year-on-year to over 7.5 trillion won. LCD prices have recently been falling on the attacks of low-price competition from Chinese companies. The overall display revenue is estimated to have increased 14 percent to around 9.5 trillion won.

    On the contrary, Samsung’s mobile communication business is believed to have suffered. Sales of the Galaxy S9, which was released in the second quarter, are middling, and the company is believed to have spent a large amount on marketing the Galaxy Note9, which was released in August. This likely had an effect on the company’s operating profit.

    In the third quarter, market analysts believe the mobile business dropped 9 percent to 25 trillion won, while operating profit fell nearly 30 percent year-on-year to 2.3 trillion won compared to the 3.3 trillion won recorded a year ago.

    The company’s dependency on its semiconductor’s business is becoming an increasingly large concern.

    “While the third quarter guidance report is positive in that it exceeds earlier market consensus, heavy dependency on semiconductor performance is a negative [for Samsung Electronics],” said Kim Yang-jae, analyst at KTB Investment & Securities. “[Samsung Electronics] is facing a slowdown on earnings momentum, as DRAM prices has been falling since the fourth quarter.”

    DRAMeXchange, a computer chip market research firm, estimated that DRAM and NAND flash prices will fall in the fourth quarter compared to the third quarter due to difference between supply and demand. When compared to the third quarter, DRAMeXchange projected a 5 percent drop in the fourth quarter, sharper than earlier estimates of a 1 to 3 percent decline.

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  • Korea’s jobless rate rises in September

    Korea’s jobless rate rises in September

    South Korea’s jobless rate rose slightly in September due to a fall in employment in the retail and restaurant sectors, with poorer-than-expected job creation continuing, government data showed Friday.

    The unemployment rate stood at 3.6 percent last month, up 0.3 percentage point from a year earlier, marking the highest rate for September since September 2005, according to the report compiled by Statistics Korea.

    The number of employed people reached 27.05 million in September, up 45,000 from the same month in 2017, according to the data.

    The unemployment rate for young adults — those aged between 15 and 29 — was 8.8 percent, down 0.4 percentage point from the previous year.

    The employment rate stood at 66.8 percent in September, down 0.1 percentage point from a year earlier, with the corresponding figure for young people at 42.9 percent, up 0.7 percentage point over the cited period.

    The number of newly added jobs improved last month, after staying below 10,000 per month for the second straight month. The retail segment saw a reduction of 100,000 jobs in September compared with a year earlier, and the lodging and restaurant sector also shed 86,000 jobs last month.

    The manufacturing sector also saw the reduction of 42,000 jobs last month.

    In contrast, the healthcare and IT sectors added 133,000 and 73,000 jobs, respectively.

    “A slowdown in the reduction of jobs in the manufacturing sector helped boost job additions, but any sharp rise in job creation is unlikely for the time being,” an official at the statistics agency said.

    The number of unemployed reached 1.02 million in September, hovering over the 1-million mark for the ninth straight month.

    In June, the government cut its job creation target to 180,000 this year from 320,000.

    Since May, the government has been implementing a 3.9 trillion-won ($3.69 billion) extra budget largely to create jobs.

    The push comes as President Moon Jae-in has called for all-out efforts to create quality jobs.

    The supplementary budget is the second of its kind under the Moon administration. Last year, the government set aside an 11 trillion-won supplementary budget that focused on creating high quality jobs.

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