Korean IT Firms Benefit from the Won's Decline

Korea's leading IT exporters are benefiting from the recent decline in the value of the Korean Won.  According to an article in today's Korea Times, the Won this week fell to as low as 1,062.6 per dollar, the weakest since December 2004.  A source at Samsung Electronics estimated that "if the exchange rate drops 10 won, we expect won-denominated sales to rise 300 billion won."  Exports account for 80 percent of Samsung's sales. In the second quarter, the electronics giant reaped an additional 300 billion won in sales thanks to the weakening won, sources say. LG Electronics benefits in a similar fashion.  "When the won-dollar rate drops 10 won, then we expect to gain some 70 billion in won-denominated sales," an LG spokesman said. 

However, the changing value of the won is a double-edged sword.  South Korea's airlines, steel makers and oil refiners, are suffering from the weaker won in the wake of surging prices for imported raw materials.