[Asia Economy Reporter Jeong Hyunjin] Among the important products and components in global economic activities such as semiconductors, electric vehicles, and smartphones, only five items with 'Made in Korea' held the number one market share last year. Korea ranked 4th for the second consecutive year as a country possessing the world's number one market share items, following the United States, China, and Japan. Although the number of companies calling for 'de-China' is increasing, Korea is struggling to expand its market presence as it is being pressured by China, which has strengthened its presence mainly in high-tech fields such as electric vehicles (EVs), and is being outpaced by Japan, the original strong player.
◆ Five Samsung Products Including Semiconductors and Smartphones Ranked No. 1
On the 23rd, the Nihon Keizai Shimbun announced the results of the '2021 Major Goods and Services Market Share Survey,' which annually investigates the market shares of the top five companies in 56 key final products, services, core components, and materials important to global economic activities. Korea was found to have five items ranked number one in market share. These items were DRAM, NAND flash, smartphones, flat-panel TVs, and organic light-emitting diode (OLED) panels, all of which were Samsung Electronics products ranked first.
In the 2019 survey, Korea ranked joint 3rd with Japan, following the United States and China, by holding the number one market share in seven items. However, in the 2020 survey, Korea dropped to 4th place after losing the number one spot in large LCD panels (LG Display) and shipbuilding (Hyundai Heavy Industries) to China's BOE and China State Shipbuilding Corporation (CSSC), respectively.
Items in which Korea ranked first. Korea ranked first in five items: organic light-emitting diode (OLED) panels, DRAM, NAND flash, smartphones, and flat-panel TVs. (Source: Nihon Keizai Shimbun)
Japan maintained the number one position in seven fields including automobiles, motorcycles, digital cameras, laser multifunction printers, image (CMOS) sensors, lithium-ion batteries for mobile phones, and polarizing plates. Until 2019, Japan had 11 items ranked number one globally, but since 2020, it has maintained seven items and, like Korea, is facing competition from China.
The United States leads with 18 items ranked number one worldwide, followed by China with 15. China surpassed Japan to take second place for the first time last year and has been showing growth in major global markets, narrowing the gap with the United States. When 70 items were surveyed last year, the United States had 24 items ranked number one, while China had 12, showing a twofold difference.
◆ China Accelerates Growth in Electric Vehicle Sector... Korea and Japan Falter
As can be seen from the number of items ranked number one in market share, China's growth is strong. Among the 56 surveyed items, Chinese companies were included in the top five for 32 items. Of these, 21 items saw an increase in market share. Nihon Keizai reported that among 28 major high-tech items, 13 saw an expansion in China's market share. Six items saw a decrease, and the remaining nine items did not have Chinese companies in the top five.
The sector where China showed remarkable growth was the electric vehicle-related sector. The market share of China's CATL, the world's largest battery manufacturer, rose to 38.6% last year, up 12 percentage points from the previous year. Combined with another Chinese battery company, BYD, the market share of Chinese companies increased by 12.2 percentage points to 46.3%. Korea's market share in the same category decreased by 4.1 percentage points.
Regarding BYD, Nihon Keizai reported that it ranked fourth in market share in the electric vehicle complete car sector, surpassing the Renault-Nissan-Mitsubishi alliance from France and Japan. BYD's market share increased by 0.7 percentage points to 6.8%, while the Renault-Nissan-Mitsubishi alliance's share decreased by 2.8 percentage points to 5.6%.
In the insulating material market, a key material for lithium-ion batteries, China's Shanghai Energy increased its market share to 28.7%, widening the gap with Japan's Asahi Kasei, which holds 10.7% and ranks second. Shanghai Energy overtook Asahi Kasei in 2019 to take the number one spot and has been expanding its presence in the market. Nihon Keizai stated, "Chinese companies are solidifying their position throughout the rapidly expanding electric vehicle supply chain, from start to finish."
China's growth is also rapid in the display sector. China's BOE has rapidly expanded in recent years, increasing its market share in both large and small to medium-sized LCD (liquid crystal display) panels. Additionally, China's pursuit continues in the OLED panel market, where Korea has been strong. Korea's market share in the OLED panel market decreased by 4.2 percentage points, while China's market share increased by 3.7 percentage points.
Nihon Keizai commented, "The Biden administration in the United States is strictly regulating exports of advanced semiconductors to China, and the US-China conflict over economic security is intensifying." It added, "Although supply chain reviews are required in light of China's potential attack on Taiwan, the survey results show that Chinese companies have a high market share." Masahisa Inagaki, a partner at KPMG FAS, said, "As the US-China hegemonic competition intensifies, global companies will need to reorganize their supply chains into Chinese and non-Chinese markets."
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