Site: Hyundai Electronics Industries Co., Ltd. (HEI)
San 136-1 Ami-ri, Bubal-eub, Ichon-si
Kyoungki-do, 467-701, Korea
Date Visited: June 4, 1997
WTEC: J.V. Evans (report author), J. Pelton
With its 57 subsidiaries and assets of $60 billion, Hyundai is the largest of the Korean conglomerates. Hyundai Electronics Industries (HEI), established in 1983, represents a little over 10% of Hyundai's business. Hyundai Electronics Industries has a strong position in semiconductors, having developed the first 256 Mbit Synchronous DRAM and first MPEG 2 decoder chip. Other business areas include displays (both liquid crystal and flat panel plasma displays), multimedia systems and telecommunications. Hyundai Electronics Industries has over 20,000 employees and in 1997 expected sales of over $5 billion, of which the telecommunications sector would represent about 10%. HEI has subsidiaries in the United States (10), the U.K. (2), Germany, China (including Hong Kong) (3), Taiwan, Japan, and Singapore. Countering its late entry into the field, HEI has a rigorous R&D program, plowing 10% of its sales into this activity.
Hyundai entered the communications satellite business through its participation in the Loral/Qualcomm Globalstar project. In return for its $28.5 million investment contribution, Hyundai secured for itself the role of Globalstar service provider in Korea, a portion of the satellite manufacturing activity and transfer of the technology necessary to succeed in this, and a role in the assembly integration and test of the satellites. HEI's Satellite Business Division has the ambition to become a full satellite manufacturer, comparable to those in the United States or Europe by the year 2001. To this end, it has a team of 10 engineers in Italy at Alenia assisting in the assembly of the Globalstar satellites. The last two or three will be assembled in Korea in a new $200 million large satellite manufacturing plant that is under construction. In this manner, HEI will position itself as capable of AI&T. At the same time HEI is building components for the Globalstar satellites, including low-noise amplifiers, the master local oscillator and the L/C-band up-converter. All this work is being performed in new modern clean room facilities complete with a large assemblage of automated test equipment to speed the post-manufacture checkout.
HEI managers believe that approaching its goal of full-scale satellite manufacturing through this "top-down" and "bottom-up" approach (i.e., establishing an assembly, integration and test (AI&T) capability, as well as being able to supply content) is its best strategy, and seem prepared to make whatever investments are necessary to achieve this quickly. While the work force is currently 375 (100 of whom are engineers), it is expected to grow to over 1,000 by 2001. A new building, 126 m by 75 m, is under construction, which will house clean rooms for satellite integration, an antenna range, thermal vac and vibration rooms and screen rooms. This facility was scheduled to begin operation in September 1998.
Provision of service via the Globalstar System will be provided by a sister division (Hyundai Information and Telecommunications), which is part of a consortium planning to offer service in a total of 15 Asian countries. HEI, however, will likely supply some of the ground segment equipment. As a consequence of its present relationships with Loral and Alenia, HEI is exploring an investment position in the Cyberstar and/or Skybridge projects.
HEI also has a relationship with the Koreasat program. It has been developing VSATs for the Korean market and a paging system network. It has secured a place on the Lockheed Martin team that won the Koreasat-3 program and will build (with LM's assistance) the Ka-band transponders.
HEI sees the growth of the communication satellite business being fueled by the demand for "personalized communications," i.e., services tailored to the needs of individuals or small groups (e.g., a business). This demand will entail the creation of huge networks in which wireless and terrestrial facilities are interconnected seamlessly. These networks will have to be "intelligent," i.e., interactive and adaptive (providing, for example, "bandwidth-on-demand"). Services to be offered by these networks will include entertainment, education, business transactions, Internet access, etc.-all in digital format. The company envisions individuals having a personal terminal that provides phone, paging, GPS positioning, fax, and e-mail, all in a single small unit.
The Satellite Business Division has an R&D activity employing 75 people engaged primarily in developing technology for space and ground antennas, and for transponders. To this end, the R&D program includes work on active phased arrays for Ka and Ku-band, beam-forming networks, and GaAs monolithic integrated circuits (MMICS). The group has its own GaAs fabrication facilities and is currently developing circuits with feature size of 0.6 Ám.
Hyundai, the largest of the Korean conglomerates, has made a strategic decision to enter the communications satellite market and has an ambitious plan to become a full-scale satellite manufacturer by the year 2001. To this end it has formed a Satellite Business Division within Hyundai Electronics Industries and entered into a relationship with Loral, which has secured for HEI a role in the Globalstar Program. This includes the manufacture of some of the payload components and transfer of technology in the assembly, integration and test (AI&T) of satellites. Large, new facilities are under construction to support this activity (which were scheduled for completion by September 1998 and will be used to assemble and test the last two or three Globalstar satellites). Hyundai is also involved with the Koreasat program, having developed VSAT and paging systems for Koreasat-1 and 2, and captured the Ka-band transponder portion of the contract to construct Koreasat-3.
While HEI's plans seem exceedingly ambitious, there appears to be the commitment in terms of the investment necessary for training, new facilities and R&D to succeed. Moreover, the Korean approach to securing technology transfer through strategic investments, alliances and/or the outright purchase of subsidiaries appears to be working well. Taking a position in the Loral Cyberstar Ka-band project is under consideration.