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South Korea firms jump onto solar bandwagon

This year, the market share of South Korean companies in the global solar cells business is expected nearly double to 4.7 percent versus a year ago.

South Korea's technology giants are behind the pace in getting on the $35 billion global solar energy bandwagon, but are now making up for lost time, snapping up assets overseas.

The push factors are compelling. The markets for their traditional businesses in chips and LCD screens are saturated and their margins thinning while their rivals in Japan and Taiwan are already racing ahead in the green technology arena.

This year, the market share of South Korean companies in the global solar cells business is expected nearly double to 4.7 percent versus a year ago, according to Mark Jee, a senior researcher at Solar & Energy, a photovoltaic market research institute in Seoul.

This compares with global No.1 cell producer China's35 percent, followed by Japan with 14 percent and Taiwan 13 percent.

In a bid to catch up, South Korea's conglomerates, through subsidiaries such as Samsung Electronics and LG Electronics are ramping up production capacity and are scouting for assets beyond their home turf to drive growth.

The chairman of Samsung Group, Korea's biggest conglomerate, pointed the way forward, saying that most of the group's current businesses and products would disappear in 10 years and that it would need to start again.

"Governments around the world are now investing in green industries to address the issues of depleting energy resources...We must move ahead decisively to take this opportunity," Lee Kun-hee said in a statement in May.

Shortly after that, Samsung said it would invest $20.6 billion in solar cell production and other growth projects over the next decade.

Deals done
Hanwha Chemical, a unit of South Korea's fourth-largest business group Hanwha, bought a 50-percent stake in Chinese photovoltaic cell maker Solarfun Power Holdings Co for $370 million in August.

POSCO, the world's third-biggest steelmaker, revealed in September plans to acquire Norways' Elkem, maker of silicon for solar panels and owned by Norwegian pizza-to-metals group Orkla.

In January, a consortium led by Samsung Group unveiled a C$7 billion ($6.8 billion) investment in Ontario that will include building four wind- and solar-power clusters capable of producing 2,500 megawatts of power by 2016.

Analysts expect to see more of such deals from South Korean firms in the coming years.

They said with their deep pockets and wide global networks, the South Korean giants would have the resources to muscle in on an increasingly crowded market and compete against established leaders such as U.S. firm First Solar and Chinese panel makers Yingli Green Energy Holdings and Trina Solar.

South Korea's largest conglomerates such as Samsung and Hyundai Heavy Industries should be best placed to compete globally, they said.