COUNTRY REPORT. Korea Die And Mold Industry June 24, A. Market Trend. Average growth rate of press die is 11.2% during last 3 years.

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1 3 Korea Die And Mold Industry June 24, 2015 A. Market Trend a. Market Overview Total production consists of 62.5% of domestic demand and 37.5% of export to over 120 countries. Although recent lasting exchange rate slump of JPY and EUR leading to lower profitability, Korea die and mold industry reached its record high in export in Die and mold production growth rate 5.6% export growth rate 20.7% Average growth rate of press die is 11.2% during last 3 years. c. Distribution of Die and Mold Company in Korea (2014) d-1 Export The total volume of mold export is 3.23 billion b. Production Status by Categories Source : the Korea National Statistical Office Statistical Survey Report on Mining and Manufacturing (2015) based on companies with 10 or more employees In 2013, plastic mold accounted for 44.1% of the entire die and mold production and press die for 35.3%; both amounting to 79.4% in total. Average growth rate of plastic mold is 6.8% during last 3 years. TAGMA TIMES NEWS LETTER SEPTEMBER-2015 dollars in (20.7% increased from 2013) In 2014, export to China and Japan recorded over 500 million dollars for the first time. Export to China reached million dollars, the 1st place on the list. 3 China remained the 2nd largest importer of Korean die and mold products from 2010, but there was an increased demand for press die due to development of Chinese automobile industry, and it led entire mold demand in China. Diversification of export 31

2 Unlike major market was limited Japan, China, and USA in past year, there were no country who has ratio over 20% in total volume of Korea mold export It came from the result of Korean mold makers effort to search new market. Also, export to emerging markets such as Turkey and Russia resulted in sharp increase in export at large, especially export to Europe drove growth of entire dollars in (2.4% decreased from 2013) Import of die and mold products in 2014 recorded 160 million dollar, 2.4% decreased from million dollars last year (2013). Change in import countries due to economic recession Imported 3.97 million dollars and 3.65 million dollars of products from Thailand and Malaysia, respectively, despite lower import dependence before. Even though its share plunged 3.7% from that of 2013, Chinese market share is increasing continuously in Korean market with price-competitiveness, and import from Southeast countries such as Thailand rose as well. Because of global economic recession, Korean export during last year. d-2. Import The total volume of mold import is 160 million 32 TAGMA TIMES NEWS LETTER SEPTEMBER-2015

3 Machine Tools As domestic economy was sluggish in 2014, Korea machine tools industry growth rate was lower than expected, 1.4% due to delayed development of new cars and reduced domestic investment in facilities. By industry, automobile and parts accounted for 35.0%, general equipment 19.5%, electronics IT 12.5%, metal 9.0%, and shipbuilding aviation 5.2%, there was no dramatic change in share compare with the previous years. For 2015, the production is expected 5.66 billion dollars, 5.3% up from last year according to moderate recovery in the domestic and foreign economy. Increased demand is projected in existing major importers like USA and Europe, resulting YOY 5% increase in domestic investment in facilities. economy also continued to become sluggish, raising demand for cheap imported die and mold products.. d-3. Demand for Molds by Industry Demand for mold in Korea according to industry, automobile 34.3%, electronics 27.6%, IT 11.7%, H/A 8.9%, semiconductor 4.3%, O/A 3.8%, and others 9.6%. The mold demand would be increased mainly in automobile and IT industry. Despite of economic hardship in major die and mold export and import country, mold demand of automobile industry expected to further grow thanks to economic recovery in USA and Europe. a. Prospects for Die and Mold Related Industries TAGMA TIMES NEWS LETTER SEPTEMBER-2015 When it come to the IT industry, in particular, using metal design in mobile phone will drive growing demand in tapping center. Also, with the help of release of new cars and decrease of consumption tax for mid-size cars, growing demand in domestic automobile industry is positive effect to machine tool industry. Tools In the 1st half, the unit price of Korean tool product was decreased due to price competition because of most market focused on cost reduction not only existing but also emerging country, and fluctuation in foreign exchange rate also led low profitability. However, demand for consumables is stable, development of related industry such as automobile, semiconductor, IT and electronics was main factor of tool production could be increased by 4.6% compare with Among others, production of the tool industry was increased covering tools for difficult-to-cut such as 33

4 nano-diamond and small tools related to mobile phones last year, but cutting tool for automobile related with die and mold industry suffered fall of demand due to decrease of domestic production, increase of overseas production, and sluggish domestic sales. In 2015, economic growth rate of Korea is expected over 3%, the production of the tools industry could achieve billion dollar, 3.7% up. Plastic Industry Due to overall global economic was slow downed, demand for consumer goods has fallen in 2014, the profit of Korean plastic chemical industries is decreasing during 3 years. The automobile industry, a major consumer of plastic items, is likely to hit a low growth rate around 3% in However, demand for new technology refer to ecocar and other goods to improve fuel efficiency is likely to record sharp growth in In particular, the trend of regulation for gas refer to greenhouse effect and smoke from car is leading investment and research to develop new plastic applied material, the plastic industry could be change to rising curve based on such trend and traditional existing demand for electronics, IT products. Also, applied industries in bio-plastic and recycling technologies are expected to drive progress in the industry. b. Prospects for Demand from Major Die and Mold Consumer Industries & Production Conditions Automobile Industry Virtuous cycle of export and production of die and mold by maintaining and reinforcing competitiveness of the industry Operating automobile facility in China and Brazil. Export to overseas car makers and supply to overseas factories likely to grow. Increase in demand for SUVs with high share in export, launching new-car Automobile will drive the development of the Korean die and mold industry with the IT industry Semiconductor Industry The industry expected to grow both in production and export. Having the brightest prospects among major die and mold demand industries. Despite of PC and smartphone market was saturated, increasing in export of overall manufacturing industry will give positive effect to semiconductor industry through by new applied field demands for such as servers, wearable devices, SSD, and cars. However, the ratio of semiconductor in the Korean die and mold industry is only 3.4%, it seems the positive effect is not very much critical. H/A Industry Worsening domestic and global conditions led to fall in production and export last year. Despite favorable factors such as 2014 Brazil Worldcup, domestic demand continued to become sluggish for a long time. Competition becomes fiercer; aggressive R&D investments of competitors, fluctuation of exchange rates, and FTAs. Growing global demand likely to increase export and production. Better living standards of developing country lead to growing demand for innovative items such as UHD TVs. Industry leaders in Korea increase investments and make efforts to gain differentiated competitiveness based on technological advantage, expecting 3.4% of export this year. 34 TAGMA TIMES NEWS LETTER SEPTEMBER-2015

5 IT Industry Growing export likely to continue this year. Growing subscribers of smartphones lead to growing demand and release of newest smartphones. In emerging markets including developing countries, replacement for SSD and computer parts results in growing demand. Lower growth rate than before, though. Due to the nature of IT industry is most sensitive to economic condition, effect of external factors and increase of lower prices items from new competitors results in fiercer competition. The 22nd Korea Int'l Die Mold & Related Equipment Exhibition Period : March 10(Tue) - 14(Sat), 2015 / 5 days Venue: Exhibition Center 1, KINTEX Participants: 430 companies from 20 countries, 2 32,000m (1,850 booths) Visiting countries: 32 countries Scale of exhibition held together with expos of related industries Other events: over 20 events including seminars on die and mold industry and related industries INTERMOLD KOREA 2017 is scheduled for Mar (biannual) a. Result of Expo in Korea Title: INTERMOLD KOREA 2015 b. Overseas marketing activities Participation in overseas die and mold exhibition and other related industries Country Report - Malaysia Content of report Engineering supporting services - background information Malaysia economy - facts and figures Engineering supporting services - facts and figures Trends and opportunities Engineering supporting services - background information Engineering supporting services The Malaysian engineering supporting services covers the following sectors : The MOULD and DIE Sector The Metal Machining Sector The Metal Stamping & Pressing Sector The Casting and Pressure Die Casting Sector TAGMA TIMES NEWS LETTER SEPTEMBER-2015 The Surface Engineering Sector The Heat Treatment Sector The Forging Sector MOULD & DIE Sector Established since the 1970s with the arrival of investments of multi-national companies, especially in the E&E sector. Initially set up to support these MNCs. Subsequently developed into full-fledged mould & die making entities with capabilities in designs, development, and fabrication of very high precision and complex toolings. About 1200 companies, including SME s in the market, providing about 25,000 jobs. One of the leading supporting industries. 35

6 About 40 companies, including SME s; 80% of them are foreign owned, or joint ventures General metal based plating process All types of plating process, anodizing, phosphating Servicing semiconductor (e.g. lead frames), E & E, automotive industries Thermal Spray, servicing e.g. the oil & gas industry Metal Machining Sector About 1000 companies, including SME s Two categories: Contract machining/components for the automotive, oil and gas, standards parts like pins, bushings and shafts, gears, E & E, etc. Low volume/high mix, made to order, jobbing/repair Mixed of high precision & general Metal Stamping & Pressing Sector It is a very well established sector About 600 companies, including SME s Supporting industries such as automotive, E & E, machineries & equipment, and packaging Demand for high speed stampings & high precision parts Demand for stamping and pressing of parts made from high strength materials Fine blanking Heat Treatment Sector About 20 companies, including SME s Essential service for metalworking industries Services include hardening & tempering in conventional and vacuum furnaces, standard treatments such as annealing, normalising Surface treatment such as carburising, carbonitriding, nitriding, PVD coating, flame and induction hardening Cryogenic or sub-zero treatment Batch and continuous processes Malaysia economy - facts and figures Casting and Pressure Die Casting Sector About 70 companies, including SME s 30% cater for the automotive industry 50% cater for consumable goods: components for home appliances, c a m e r a s, c o m p u t e r s, E & E, telecommunication The Surface Engineering Sector 36 TAGMA TIMES NEWS LETTER SEPTEMBER-2015

7 GDP MALAYSIA INDUSTRIAL PRODUCTION INDEX (IPI) - MANUFACTURING 2014 Malaysia's Top 6 Exports in 2013 & 2014 TAGMA TIMES NEWS LETTER SEPTEMBER

8 MAJOR EXPORT & IMPORT DESTINATIONS & before : USD1.00 = RM : USD1.00 = RM3.27 MALAYSIA ECONOMY - TOP TEN TRADING PARTNERS Investments & employment in approved projects in 36 TAGMA TIMES NEWS LETTER SEPTEMBER-2015

9 Industry Related Fairs & Exhibitions 2015 Mould & Die Sector - Total Import & Export, USD million Mould & Die Sector - Total Market 2014, USD Million Mould & Die Sector - Total market, USD million The estimated total market size of the Malaysian mould & die, tooling technologies is about USD 820 million manufacturing sectors RINGGIT MALAYSIA against MAJOR CURRENCIES as at 31 Dec, 2014 Engineering supporting services - facts and figures Mould & Die Sector - Total Import & Export, USD million Import / Export Duties & Taxes TAGMA TIMES NEWS LETTER SEPTEMBER-2015 If the machining sector is added to it, the total is estimated to be worth approximately USD 1.2 billion This USD 1.2 billion includes imports, exports, and the locally produced moulds & dies, toolings, jig & fixtures, machined components for domestic consumption The total GDP in 2014 for the manufacturing sector in Malaysia at current prices is about USD 78.4 billion Mould & Die Sector - Import & Export, USD million Engineering Supporting Engineering Moving towards high value-added chain; this achieved through and driven: capabilities in high precision and complex processes. accumulated knowledge and experience over the last years. Investments in sophisticated equipment and processes Relatively skillful workforce. stringent market demand for sophistication and quality, both locally and internationally. Increasing costs of production and competition demand higher efficiency and quality. moving towards quality rather than price driven markets. Engineering Supporting Engineering 35

10 Focusing on high precision moulds and dies for the semiconductor, and the electrical and electronics industries. Companies are looking outward and moving into the export market. The market is relatively large within ASEAN, with a worth estimated at about USD 820 million. The value of imports of moulds & dies is substantial, at about 40% of the total market size; hence this presents encouraging opportunities. Engineering Supporting Engineering Excellent supporting services and infrastructure for investments in the manufacturing and other sectors. Developing into a service and supply hub for the precision engineering supporting industry. For the Mould & Die Sector Both the import and export of the mould and die sector registered an increase compared to previous few years. The future remains bright with the continuing high annual market demand; as indicated by the significant importation of moulds and dies. Export opportunities to the ASEAN region remain significant; and also with increasing export trend towards the EU market. For the Mould & Die Sector The main focus of is in the: 36 TAGMA TIMES NEWS LETTER SEPTEMBER-2015