Digital Transformation Led in Electronics IT, But Carbon Neutrality Lags Behind

[Asia Economy Reporter Choi Dae-yeol] An analysis revealed that the domestic electronic information and communication industry responded faster to digital transformation compared to other industries but lagged significantly in carbon neutrality.

At the Future Industry Forum hosted by the Korea Chamber of Commerce and Industry on the 25th, an evaluation was conducted on how the domestic electronic information and communication and display industries have responded to digital transformation and carbon neutrality. The level of response to digital transformation and carbon neutrality is considered a crucial factor that will determine the overall competitiveness of the industry in the future. In the field of digital transformation, the electronic information and communication industry ranked second highest after semiconductors. The display industry ranked fourth.

Park Hyung-gon, a partner at Deloitte who presented that day, said, "The display and electronic information and communication industries have advanced digital transformation ahead of other industries," but added, "Unlike semiconductors, rapid investment in production facilities did not follow, resulting in digital transformation rankings of 2nd and 4th." He further explained, "The electronic information and communication industry proceeded with digital transformation while maintaining existing processes, which limits the collection and utilization of data during production and causes some lag in automation of production lines."

Regarding the display industry, it was noted that while there has been some achievement in automation, the slow pace of new manufacturing facility investments makes innovative improvements difficult. It was added that manufacturing capacity should be upgraded from 8.5 generation to 10.5 generation. Partner Park advised introducing cloud, Internet of Things (IoT), and artificial intelligence (AI) technologies across the industry, improving productivity using new technologies, securing cases of innovative operational models, and establishing systems to share data obtained during production and testing processes with partner companies.

Regarding carbon neutrality, which requires absorbing as much carbon dioxide as is produced, the display industry ranked first among all domestic industries, whereas the electronic information and communication industry ranked seventh. Jung Eun-mi, head of the Korea Institute for Industrial Economics and Trade who presented this part, said, "The greenhouse gas emissions of the two industries account for about 8% of domestic industry, with direct emissions only 0.2% of domestic industry, but process emissions are 32%, and indirect emissions are 8%," emphasizing that "reducing process and indirect emissions is key."

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Process emissions are emissions caused by industrial gases used in production processes. Indirect emissions are greenhouse gas emissions generated indirectly through activities such as electricity usage. The display industry, mainly large corporations, invested in greenhouse gas reduction, reducing about 90% of process gases.

Director Jung said, "Due to the surge in demand for electronic devices caused by COVID-19, indirect emissions are expected to increase in both the display and electronic information and communication industries," and added, "To achieve carbon neutrality goals, it is necessary to increase the use of renewable energy and enhance contributions to society’s overall greenhouse gas reduction through the production of high-efficiency and eco-friendly products."

At the same time, the forum raised the argument that the current minimum tax system should be revised to ensure the effectiveness of tax deductions for investments in new industrial sectors that encourage the development of core technologies. This system partially deducts taxes but requires payment of a minimum amount. Jang Seok-in, distinguished professor at the Korea University of Technology and Education, said, "To secure competitiveness not only in the organic light-emitting diode (OLED) field but also in the next-generation display market, an environment that enables proactive corporate investment must be created."

The industry argued that government support is necessary to address greenhouse gas emissions and enhance industrial competitiveness. Jin Hong, executive vice president of the Korea Electronics and Telecommunications Industry Promotion Association, said, "The electronics and IT sectors have seen steady export growth recently due to increased consumer sentiment and digital transformation demand despite the COVID-19 situation," and added, "There is a concern to address issues such as fostering new digital industries and reducing greenhouse gas emissions in line with the accelerating paradigm shifts in the economy and environment." He urged, "The government should strengthen tax support for investments in greenhouse gas reduction facilities and rationally improve regulatory laws such as the Serious Accidents Punishment Act."

Kim Sung-jin, executive vice president of the Korea Display Industry Association, said, "Since the display industry has a high demand for a ‘convergence alliance,’ integrated support for this is necessary," and added, "Policies such as financial, tax, and regulatory package support are needed to build a cooperative ecosystem." Woo Tae-hee, executive vice president of the Korea Chamber of Commerce and Industry, said, "For digital transformation and carbon neutrality to become new opportunities for growth, corporate efforts and government policy support must be harmoniously promoted."

This content was produced with the assistance of AI translation services.