"South Korea's Semiconductor Efficiency Lower Than Global Average"

Hankyung Research Institute Analyzes Efficiency of Global Semiconductor Companies

[Asia Economy Reporter Kim Pyeonghwa] Last year, the investment-to-profit ratio (efficiency) of Korean semiconductor companies was found to be lower than the average of the top 100 global semiconductor companies. Since facility investment and research and development (R&D) have a decisive impact on efficiency, there are claims that government support at the level of competing countries is necessary.

The Korea Economic Research Institute announced a report titled 'Analysis of Efficiency of Global Semiconductor Companies and Policy Implications' on the 19th containing these findings.

The report analyzed the efficiency over the past five years (2018?2022) based on financial data of the top 100 global semiconductor companies by market capitalization. It measured relative efficiency by analyzing input factors such as total assets, cost of sales, and selling and administrative expenses, and output factors such as sales revenue, operating profit, and net income.

As a result, the average efficiency of global semiconductor companies was found to be higher than that of Korea. Looking at last year's efficiency, the global average was 67%, while Korea's was 65%. Korea recorded 87% in 2018, ranking first globally, but its efficiency has recently declined. This was influenced by the downturn in the memory semiconductor market.

The report analyzed factors affecting the efficiency of the top 100 global semiconductor companies and pointed out that a 1% increase in facility investment leads to a 0.01 percentage point increase in efficiency. It also suggested improving the business environment to enhance R&D, production facility investment, and return on equity to boost the efficiency of domestic companies.

Lee Gyuseok, a senior researcher at KERI, said, “The efficiency of Korean semiconductor companies should be improved through support at least at the level of major overseas countries, such as corporate tax cuts and increased tax credit rates for R&D and facility investments.”

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