Revenue Problems for Korea's DMB Industry

Despite healthy levels of viewership, the latest reports suggest that advertising levels on South Korea's Digital Multimedia Broadcasting services are not providing enough income to sustain the business.  As a result, according to The Korea Times , the nation's six terrestrial DMB operators are considering halting their coverage on subway lines in a desperate move to shed costs and keep the business afloat.  Less than three years ago they had jointly invested to complete transmission networks in subway lines, allowing commuters to watch World Cup football games.
The number of viewers has not been a problem. About one-third of all Koreans have access to mobile television, dubbed digital multimedia broadcasting (DMB) here, with free terrestrial DMB services garnering around 16 million users and another 1.8 million subscribed to satellite-based DMB, a pay-T.V. service provided by TU Media.
Instead, finding reliable revenue streams for the DMB services has been the major challenge.  Since terrestrial DMB services are free for users with television-enabled terminals, advertising is the only source of revenue for the operators.

Intel to Invest in Three U.S. Fabs in the Next Two Years

The announcement that Intel will invest $7 billion to expand and transform three U.S. manufacturing plants should be good news for Korean electronics companies.  Business Week reports  that, as early as this fall, the company plans to start shipping the world's first microprocessors created at the atomic 32 nanometer level--transistors so small that 4 million of them could fit in the period at the end of this sentence.  Intel CEO Paul Otellini said in a speech that "the chips produced by the new fabs will become the basic building blocks of the digital world, generating economic returns far beyond our industry."  By shifting to a more advanced manufacturing process, Intel hopes to make inroads into selling chips not only for PCs, but for consumer electronics, cell phones and other internet-connected devices.  Such chips could substantially lower development costs for Samsung, LG and their international competitors.

Korean Chipmakers Widen Technology Gap in Memory Chips

Just after my previous post about Samsung Electronics development of 40 nanometer technology for manufacturing memory chips, Hynix announced on Sunday that it has developed the world's first one gigabit DRAM chip using 44 nanometer technology!  These announcements make it clear that Korea's main semiconductor manufacturers have opened up a technology lead over their major rivals in other countries.  Reports in the Korea Times and other local press noted that prices of DRAM chips are gaining momentum after the German-based firm Qimonda filed for insolvency.  The productivity of this latest DDR3 (double data rate) chip will be 50 percent greater than chips now on the market.   Production costs and power consumption by the chips will also be lowered.  A significant aspect of this development is that it is based on technology advances within Hynix.

Another World's First in Memory Chips for Samsung Electronics

As reported in the JoongAng Daily, Samsung Electronics has developed DDR2 dynamic random access memory using 40-nanometer technology, becoming the first among the world's leading chipmakers to do so.  This new technology allows Samsung to enhance production by 40 percent over the current 50 nanometer technology that it and Hynix are using.  The 40 nanometer DRAM chip also consumes up to 30 percent less electricity than chips produced with the older technology.
For chip makers, developing higher DRAM density means they can cut production costs and lead market trends by providing the latest DRAM chips at higher prices. Since chips are produced from a wafer, the smaller chips are, the more chips are produced out of one wafer.
This new development gives Samsung a head start on its rivals and industry observers said it will take two years for them to catch up.

Korea to Build Ultra-Broadband Internet by 2012

I must confess that I was not surprised today to see the local press prominently covering the announcement by the Korea Communications Commission that the government and communications industry would invest some $25 billion over the next five years to build an "information ultra highway."  After all, when then-U.S. Vice President Al Gore gave a famous speech at UCLA in 1994 about the need for the U.S. to build "Information Superhighways," the U.S. failed to do so, but Korea actually built information superhighways.  The Korea Information Infrastructure project, started in 1995, was originally planned for completion in 2010.  However, because of technological advances and industry competition, it was completed a full five years early.  It laid down fiber optic backbone links connecting over 140 cities and towns in South Korea---a massive construction project, but very successful.
Koreans, perhaps more so than any other people in the world, have learned the importance of speed in the information age. Japan would be a close second in this recognition, as I learned at a Seoul conference on Ultra-Broadband last Fall.  This is a lesson that Microsoft should have learned before it released Vista, an operating system that actually ran more slowly than its predecessor, XP.
As reported by the Chosun Ilbo , the Korea Communications Commission on Sunday said it finalized plans for Internet services at an average speed of 1 Gbps through fixed lines and 10 Mbps through wireless. One Gbps allows users to download a 120-minute film in just 12 seconds.
As reported by the Korea Times ,the ultra broadband convergence network (UBcN), which is slated for completion in 2012, will enable users to transmit data at an average speed of 1 gigabyte per second (GBp) through fixed-line connections and maintain the rate of 10 megabytes per second (MBps) on wireless connections, about 10 times faster than existing broadband and third-generation (3G) networks.  The government plans to replace 70 percent of the country's circuit-switched network, used for fixed-line telephony, with an IP network by 2013. About 50 percent of the mobile telephony network will be IP-based by then.
This announcement about Ultra-Broadband is creating some stir and public debate here in Korea, but my guess is that the plan will be realized, at least as successfully as the earlier KII project that was completed ahead of schedule.  The reason?  Simply that customers here, and worldwide, enjoy the services that ultra-fast internet access provides.