KT to Negotiate Semiconductor Chipset Prices with Partners... "Promoting Mutual Growth"

KT is set to negotiate semiconductor chipset prices together with its partners. Additionally, the current 4-month raw material demand forecast period will be extended to 12 months to enhance the management stability of its partners.

KT announced that its SCM Strategy Office held a win-win communication meeting with the KT Partners Council on the 11th at Le Meridien Seoul Hotel located in Jung-gu, Seoul.

KT Partners Council Win-Win Communication Meeting Site
[Photo by KT]

The KT Partners Council is composed mainly of KT's core partner companies and serves as the KT Entrusted Companies Council. Following the inauguration of KT's new CEO, Kim Young-seop, the council held the meeting to actively pursue win-win cooperation with partners. The meeting was attended by the SCM Strategy Office of KT and executives from six core partner companies, including Gaon Group, the chairman company of the KT Partners Council, as well as Gisan Telecom, NWC, Ubiquoss, Iruon, and Woorinet.

KT plans to establish a 'Chipset Company Council' and negotiate with global chipset companies on behalf of its partners. Due to global semiconductor supply instability, small-scale partners are facing difficulties in price negotiations and securing quantities. Instead of individual partners with weak negotiation power, KT will take the lead in primary negotiations and price setting. Lee Jong-sung, KT’s Executive Director in charge of New Business SCM, stated, "We believe this will contribute to securing appropriate component prices and quantities for KT partners."

Furthermore, to alleviate partners' burdens related to uncertainties from rising raw material prices and inventory holdings, the 'demand forecasting system' will be extended to 12 months. Currently, KT informs partners of the required quantity for 4 months in advance so they can prepare accordingly. However, partners have voiced concerns that the 4-month demand forecast is insufficient to respond to recent volatile component price fluctuations. Lee said, "The business environment is unpredictable, especially nowadays when customer demand changes in real time, making a 12-month forecast a challenging choice. We listened to our partners' difficulties and decided to share the pain together."

Im Dong-yeon, CEO of Gaon Group, the chairman company of the KT Partners Council, said, “As a core partner, we will take the lead in discussing realistic and concrete win-win cooperation plans that lead to strengthening competitiveness for both KT and its partners. We appreciate KT’s consistent efforts to understand and overcome the practical difficulties faced by partners together.”

KT plans to concretize the ‘12-month demand forecasting system’ and ‘Chipset Council’ discussed at this meeting and establish them as practical win-win cooperation purchasing systems. Additionally, KT will act as a partner for overseas expansion of promising startups and partners. In June, KT participated in Viva Technology 2023 held in France with the Ministry of SMEs and Startups. KT also selected 15 companies to participate in the International Broadcasting Convention (IBC) in the Netherlands and the Mobile World Congress (MWC) in Las Vegas in September. They successfully concluded four Memorandums of Understanding (MOUs) and contracts worth tens of billions of Korean won. KT is also preparing for the Dubai Information and Communication Technology Exhibition (GITEX) held in the United Arab Emirates (UAE) starting on the 15th. Lee said, "KT fundamentally believes that the competitiveness of its partners is directly linked to KT’s business competitiveness. Through continuous communication, we plan to further strengthen current support programs and establish new programs or systems as needed to promote mutual growth."

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