The enterprise ICT revenue opportunity in South Korea is forecast to increase at a compound annual growth rate (CAGR) of 7.2% between 2023 and 2028. The country’s high-speed internet connectivity with next-generation networks available to enterprises, positive ICT investment sentiment, and evolving application areas for emerging technologies like Internet of Things (IoT) and artificial intelligence (AI) will drive the ICT market in the country, according to GlobalData, a leading data and analytics company.
GlobalData’s ICT Customer Insight Survey* indicates a positive outlook for enterprise ICT spending in South Korea, with majority of respondents, i.e., 77.1% claimed an increase in their enterprise ICT budget in 2024 vs. 2023.
Pragyan Tarasia, Technology Analyst at GlobalData, says: “Fast developing network infrastructure with continued 5G network expansion, and rising R&D investment by enterprises to intensify their focus on new IT projects, presents a positive outlook for the ICT market in the near-term.”
IoT: The largest revenue contributor
GlobalData’s report, “South Korea Enterprise ICT Market Analysis and Future Outlook by Segments (Hardware, Software and IT Services,” reveals that South Korea’s ICT market will be primarily driven by IoT solution area. The segment is set to account for a 18.3% share of the total cumulative revenue forecasted for 2023-2028.
GlobalData’s ICT Customer Insight Survey reveals that there has been an increase in the enterprise ICT budget allocations in IoT infrastructure including hardware, software and services. About 67.1% respondents confirmed increase in their enterprise ICT budget for IoT infrastructure in 2024 compared to 2023.
Tarasia continues: “Telcos in South Korea are offering M2M/IoT technologies, thereby enabling transformative applications across industries such as logistics, smart cities, healthcare, and agriculture. Key telecom players like SK Telecom, KT and LG U+ are offering IoT solutions through strategic partnerships, advanced infrastructure enhancements and targeted developments.”
AI: The fastest growing market
GlobalData forecasts AI to be the fastest growing solution area for the ICT market in South Korea and will remain so over the forecast period. ICT revenue from the AI reached $1.5 billion in 2023 and set to grow up to $5.4 billion in 2028 at a CAGR of 28.7%.
Tarasia adds: “In South Korea, companies are increasingly adopting AI to drive digital transformation, automate tasks, and reduce costs. Major ICT firms like Samsung, LG Electronics, Kakao, Naver, SK, and KT are heavily investing in AI, with initiatives ranging from the establishment of AI centers to projects involving advanced machine learning, AI chips, and large language models (LLMs).”
For instance, KT announced $5.4 billion investment on AI services in 2023, focusing on the robotics, education, and healthcare sectors by 2027.
Tarasia concludes: “With its advanced technology, strategic investments, and robust government support, South Korea is positioning itself as a leader in the semiconductor sector, which will in turn drive the growth and innovation across the broader ICT landscape. In 2024, South Korea unveiled a significant $19 billion investment package to bolster its semiconductor industry.”
*GlobalData’s ICT Customer Insights Survey carried out during H1 2024 highlights survey responses related to ICT investment priorities and budget allocations by enterprises in South Korea.
