ICT to Korea

Trends and opportunities

The market

The unprecedented growth of the Repulic of Korea’s (ROK, also known as South Korea) information and communication technology (ICT) industry is creating new opportunities for exporters. South Korea’s global manufacturers are proactively seeking globally sourced creative software technologies in an effort to enhance their competitiveness. The country has potential demand for industrial software solutions to support its strong manufacturing base, particularly in the aerospace, automotive, shipbuilding, electronics and machinery sectors. Opportunities include the use of embedded software in South Korean made cars, ships and electronic goods.

South Korea is leading the way in the development of an ICT-based society and the industry is one of the country’s key growth engines, accounting for 11.9 per cent of gross domestic product (GDP) in 2014 (Source: 2015 Annual Report on the Promotion of the Korean ICT Industry, National ICT Industry Promotion Agency of Korea, NIPA). During the five years from 2009 to 2014, the annual growth rate of the ICT industry was 5.1 per cent on average, higher than the total GDP growth rate of 3.7 per cent.

South Korea has been recognised as one of the world’s most advanced countries in overall ICT development and positioned as one of the leading groups in major international ICT-related evaluation indexes (Source: 2015 Annual Report on the Promotion of the Korean ICT Industry, Website of the Ministry of Science, ICT and Future Planning).

South Korea also boasts world leading broadband and mobile networks by which 98.8 per cent of households can access the internet as of July 2015 (Source: Survey on Internet Usage, Korea Internet and Security Agency).


As one of world’s leading manufacturers of hardware, the country’s four main ICT products, semiconductors, wireless communication devices, flat-panel displays, and electronic application devices, are amongst South Korea’s 10 biggest exports. The market share of South Korean made:

  • semiconductors (14.6 per cent)
  • tablets pc (9.9 per cent)
  • handset (32.5 per cent)
  • LCD panel (52.8 per cent)
  • flat panel (42.5 per cent)
  • secondary lithium batteries (43.5 per cent).


The local package software and IT service market grew by 5.1 per cent from 2014 to 2015 overall, reaching KRW 39,449 billion (A$45 billion). There is a demand in new software services, including Cloud, Big Data and the Internet of Things (IoT), which drove this growth. The IT service sector led the growth with a 5.6 per cent jump from 2014 to 2015 and the package software sector grew 3.4 per cent over the same period (Source: Ministry of Science, ICT and Future Planning, Software Policy and Research Institute, Korea Creative Content Agency).

Key trends sectors

Package Software

There was a significant transfer to cloud-based service from package software. Leaders in this segment include:

  • Hancom’s Netffice24
  • Infraware’s Polaris Office
  • Duzon’s 40 per cent increase in turnover from its expanded cloud service.

Strengthened line-up for the attacks of ransomware:

  • Ahnlab
  • EastSoft.

IT service

There is a focus on development of new business and overseas opportunities:

  • Samsung SDS’ business focus on SMAC (social, mobile, analytics, and cloud)
  • LG CNS to reinforce its business readiness for SmartFactory and Cloud Data Center
  • SK C&C to speed up SmartFactory project in cooperation with Hon Hai, holding company of Foxconn.

SK C&C and JUSDA, Hon Hai’s subsidiary for logistics business established their JV of FSK L&S (logistics and solutions) in November 2016.

Game software

There was a continued growth in mobile gaming and expanded entry into overseas markets:

  • COM2US: Successful launching of Wonder Tactkcs, mobile RPG, in four new markets (Singapore, Malaysia, the Philippines, and Australia).
  • GAMEVIL: Afterpulse, mobile FPS, showed a big success in China, and good performance in United States and Japan.
  • NEXON: Focusing its resources on Super Fantasy War, its first global mobile RPG, in 153 markets around the world.

Internet software

Expanded service coverage of online to offline service (O2O) on mobile platform and visible results of the development of fintech applications in real life.

  • Kakao Corp.: Widening O2O service coverage including taxi, shopping, advertisement on its predominant social network service platform.

Kakao and Korea Telecom will start their internet bank service each in early 2017, and the simple payment/settlement business, core of fintech market is expected to expand sharply accordingly.


Through South Korea’s creative economy strategy, new software services and technologies such as IoT (Internet of Things), big data and cloud are becoming increasingly important in helping to drive change in the areas of data sharing and cooperation. According to the Ministry of Science,  ICT and Future Planning (MSIP), South Korea is trying to create new markets and jobs by applying new software service and technologies to diverse industries.

In addition, South Korea’s creative economy drive is focusing on significantly increasing the competitiveness and effectiveness of the existing industries by promoting the use of ICT through measures like advanced artificial intelligence (AI) and robotics.

The South Korean Government has mapped out a detailed plan for the use of ICT across all sectors of government, society and business well into the future in order for the country to remain a world-leading ICT country. The government is looking to drive future growth in the local economy by combining creativity and harnessing the ideas of the local people into the continuing transformation of South Korea into a fully ICT integrated society.

Opportunity sectors


Since the historic Go game matches between Lee Sedol of Korea and Google DeepMind’s AlphaGo in March 2016, the awareness of South Korean people of AI technology has risen. And both the government and industry have been working on ways to use AI to improve the country’s industrial competitiveness by establishing the AI Research Institute in October and AI Industry Association in December 2016.

South Korea’s flagship AI solutions / platforms in place:

  • Naver: Papago, Naver’s interpretation and translation app for Korean, English, Chinese and Japanese using its own AI technology
  • Samsung SDS: Nexplant, AI-based smart factory solution
  • SK C&C: Aibril, AI service using ‘Watson’, IBM’s AI platform.

IoT (Internet of Things)

IDC Research Inc. estimated that South Korea’s IoT software market will grow CAGR 15.5 per cent for five years from 2015-2020, reaching KRW 20,971 billion (A$24 billion) in 2020 (October, 2016).

The Korean Government has been active in supporting the related industry through its national IoT strategy. In private sectors, telecommunication carriers including Korea Telecom , SK Telecom and LG UPlus have been particularly active in expanding their IoT partnerships with local service providers in different sectors by taking advantage of their network.

Virtual Reality (VR) & Augmented Reality (AR)

Like other countries, market is expected to expand with demands of individuals. Major VR/AR developers include Samsung Gear VR and game developers.

Application of VR and AR technologies to the industrial and commercial front is expected to grow in 2017. Demonstration sites for AR&VR in Korea include ‘VR Driving Experience Hall’ of Hyundai Motor Corp and ‘AR Simulator for Disaster Management Drill’ of Hanbit Soft.


The Cloud Computing Development and User Protection Act of Korea has been in place since September 2015, and worked well to encourage the government and public organisations to introduce cloud computing to expand business-to-business (B2B) links. Nowadays it is said that ‘cloud first’ strategy is widely accepted in the industry because of the overall demands for cloud-based solutions across all industries and work processes.

Leading players include local telecommunication companies Korea Telecom, SK Telecom and LG Uplus as well as major global companies Amazon, Microsoft and Google.

The cloud market is expected to grow compound annual growth rate (CAGR) of 18.2 per cent in the next four years, reaching KRW1,159 billion (A$1.3 billion) (Source: October 2016, IDC).

Smart car / autonomous car (driverless car)

South Korea has several auto makers – Hyundai, KIA, Renault Samsung, SsangYong, GM Korea etc. In terms of Smart Car development, Hyundai has been remarkable. The company plans to invest KRW 2 trillion (A$2.3 billion) on the development till 2018, and ultimately complete its driverless car model by 2020. In relation to this plan, Hyundai has been in partnership with Apple, Google, and Cisco.

Key technologies required include sensing, AI, ECU, development and update of map DB, communication infrastructure like V2X, and infotainment etc.

Next Generation (NG) Cybersecurity

The IDC estimated that cybersecurity market of Korea will grow CAGR five per cent in the next four years, reaching KRW 470 billion (A$547 million) in 2020.

Local industry experts expect new demands for cybersecurity solutions from IoT, cloud, and mobile/smart work environments. They added that identity theft from wearable devices will likely be a big social issue.

It’s said that there will be rising demands for the next generation cybersecurity technologies for the following developments in the coming years: Around 70 per cent of corporate security solutions are expected to introduce AI technologies by 2018; Around 20 per cent of investment banks are expected to introduce blockchain / distributed ledger technology by 2020.

Fintech / mobile payment

Fintech has been a popular issues in the banking and finance industry of South Korea throughout 2016, and there have been meaningful developments for the growth of the fintech market in both government and private sectors.

The government supported the industry with deregulation measures on the industry, and its effort is expected to keep going in 2017 (e.g. The Electronic Transaction Act has reduced the minimum asset requirement for new entrants from KRW 500 million to KRW 300 million, and start-ups with asset worth KRW 300-500 million can enter the fintech market).

And the investment in fintech start-ups seems to hit a record high in 2016 with more than KRW 100 billion (A$116 million), a sizable increase from KRW 8.4 billion (A$9.8 million) in 2014.

Key developments
  • Widespread use of mobile (stock) trading service: 48.5 per cent of stock trading accounts proceed their stock trading’s via mobile platforms
  • Advent of mobile asset management: According to industry experts, 300 -1,000 new individual investors subscribe mobile asset management service every month
  • Rapid growth of P2P loan market: South Korean P2P Finance Industry Association estimates that P2P finance market has grown KRW 390 billion (A$453 million) in November 2016 from KRW 35 billion (A$41 million) late 2015.
  • Rapid growth of mobile payment service: The mobile payment service market has increased rapidly in the last year in number of deals and amount, KRW 29.5 billion (A$34 million) worth amount from one million deals per day, 42.2 per cent and 41.7 per cent increase each from last year.
  • South Korea’s first internet-only bank open early 2017: Korea Telecom and Kakao Corp have won a license for internet-only bank back in November 2015, and K-Bank of Korea Telecom will start its operation in early 2017
  • The South Korean Government announced that they will be working to make the country a ‘coinless society’ by 2020 with pilot projects starting in 2017. The plan is expected to encourage on-line/mobile payment further, creating new demands for solutions for mobile payment and PG.
  • Opportunities for solution providers of mobile payment/settlement, PG, NFC, and Cybersecurity etc.

Online to offline (O2O)

Local industry experts predict O2O will become an increasingly important part of South Korea’s ICT society. The key to O2O is its ability to channel online users into physical shopfronts enabling businesses to harness the full benefits of the country’s changing business landscape. Demand for O2O applications such as omni-channels, payment and settlement systems and beacon businesses are expected to increase.

Supported by excellent mobile/broadband internet infrastructure, almost 100 per cent penetration rate of smart phones and PC, and high usages of credit cards, Korea is one of the leading countries in E-Commerce and O2O. And O2O business is expected to expand further in 2017 to cover almost all sectors of product / service commerce. The key sectors for O2O in Korea include quick delivery (People of Delivery, RGP Korea), real estate (Zigbang, Station3), transportation (Kakao, SOCAR), shopping/on-line payment(Syrup of SK Planet, YELOPAY), accommodations (YogiOte of WithInnovation, Yanolja), and medical service (Wiz Medic, Ddocdoc).

Smart healthcare

Global companies are currently competing to pre-empt the market, including Google (Google Fit), Apple (HealthKit in iOS), Microsoft (Microsoft Band) and Samsung (Gear Fit). Competition among these global players is expected to create consumer interest and demand for smart health care devices in Korea in 2017.

Open source

The IDC expected that the South Korean open source software (OSS) market will grow CAGR 12.9 per cent from 2016 – 2019, reaching KRW 126.7 billion (A$147 million) in 2019 with widened use of OSS.

(Source: 2017 Software Industry Outlook Conference, Software Policy and Research Institute of Korea (SPRi))

12 key research and development (R&D) sectors for future growth

The Ministry of Trade, Industry, and Energy (MOTIE) announced on 21 December 2016 that the country will invest KRW 7 trillion (A$8 billion) on the 12 R&D sectors as its future growth engines in cooperation with private sectors:

  • EV / autonomous Car
  • smart ships
  • IoT electronics
  • robotics
  • biohealth
  • aerospace / drone
  • premium consumers
  • state-of-the-art materials
  • AR / VR
  • next generation display
  • new energy industry
  • next generation semi-conductor.

Key ICT events

World IT Show (WIS) 2017: 24-27 May 2017, Seoul, Korea
Global Game Exhibition G-Star 2017 November 2017, Busan Korea 
Global Mobile Vision (GMV) 2017 October 2017, Goyang Korea 
Korea Electronics Show (KES) 2017, 17 ~ 20 October 2017, Seoul Korea

Links and industry contacts


Korea Communications Commission (KCC)
Korea Creative Content Agency (KOCCA)
Korea Education and Research Information Service (KERIS)
Ministry of Culture, Sports, and Tourism (MCST)
Ministry of Science, ICT and Future Planning (MSIP)
Ministry of Trade, Industry, and Energy (MOTIE)
National ICT Industry Promotion Agency (NIPA)

Industry Association and Research

Electronics and Telecommunications Research Institute (ETRI)
International Data Group - Korea
International Telecommunications Policy Review (ITPR)
Invest Korea - ICT
Korea Information Society Development Institute (KISDI)
Korea International Trade Association (KITA)
Korea Software Industry Association (KOSA)
Software Policy and Research Institute (SPRi)
Telecommunications Technology Association (TTA)

Industry Media

Business Korea - ICT (English)
ET News (English)
The Korea Bizwire - Technology (English)
Netmanias – Korea ICT News, Trends and Analysis (English/Korean)
Whowired Korea (English)

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