IT Industry

     The IT industry is characterized by technological innovations, short product
     cycles, high profits, and extensive investments in research and development,
     which have become pivotal factors in attaining a competitive edge in modern
     times.

     During the last decade, the role of the IT industry has become increasingly more
     significant with the creation, spread and usage of knowledge to create economic
     value in the knowledge-based economy. IT connects individuals and enterprises
     via networks, facilitating the production, distribution and consumption of
     information by the overall economy as well as enhancing the development of the
     intangible economy.

     In particular, any further advancement in the use of the Internet by the business
     world depends largely on the development of the IT industry. Moreover, the
     continuous development of the IT industry fuels the explosive growth of electronic
     commerce and business re-engineering.

     IT industry is one of the most dynamic fields in Korea. Along with private
     investments in the IT sector, a wide variety of policies tailored to promote the IT
     industry and information has been actively implemented.

     Currently, the IT industry stands as the most crucial sector in the Korean
     economy with its sustained development tabbed as an indispensable element of
     economic growth.


 Nano Industry

     Korea's nano industry came into being in the early 1990s when research on a
     nano scale was initiated. It began to rapidly develop in 2001 with strong
     government support to promote the industry. Most R&D in the early days of the
     industry was conducted under the aegis of government policy, but the number of
     private-sector companies entering the industry is now rapidly increasing.


 Semiconductor Industry

     Leveraging global leadership in the memory IC sector, Korea's semiconductor
     industry has been growing at a CAGR of over 20%.


 Auto Industry

     The year 2005 marks the 50th year since Korea first began manufacturing
     automobiles. From the time when Korea started with a simple KD assembly
     process in the 1960s it has grown to be the only nation, among those that started
     developing an auto industry after World War II, which is capable of manufacturing
     cars with its independently-developed technologies, thereby becoming the world's
     fifth-largest automaker today.

     Korea's auto industry in global perspective As of the end of 2005, the number of
     cars manufactured in Korea reached 3.7 million, of which exports amounted to
     2.59 million units, making Korea the world's 5th-largest manufacturer (5.6%), after
     the United States, Japan, Germany and China. In terms of domestic consumption
     it ranked 14th in the world by consuming 1.14 million units in 2005.


 R&D

     Korea is relatively well equipped with various assets required by multinational
     corporations, such as excellent human resources, a solid economic foundation
     that allowed quick recovery from the 1997 financial crisis, a rapidly growing
     market and a mature social infrastructure. In addition, Korea has a geographical
     advantage in that it is close to the advanced capital and technology of Japan and
     the great growth potential of China.

     Multinational corporations have recently begun to pay serious attention to the
     rapid growth and the state-of-the-art technologies available in the Korean market.
     As a result, there has been a dramatic increase in the number of corporate
     research institutes and R&D centers built in Korea. These research facilities are a
     key element of most companies' headquarters.

     As of September 2005, total number of foreign-invest R&D centers reach 901
     including 137 corporate R&D centers that are wholly owned by foreign investors.
     In terms of the countries of origin of 100% foreign-owned R&D centers, the
     following table shows that 52 R&D centers have their parent companies in the
     U.S.A., 19 are from Germany, and 17 from Germany. These countries are
     followed by the Netherlands, France, Switzerland, Singapore, and China.


 Venture Industry

     One of the most notable phenomena in Korean economy in the late 1990s is the
     emergence of a new business sector called the "venture company." Fall of the
     economic system centered upon large corporations since the late 1997 created
     an environment favorable to smaller businesses. As a result, number of venture
     companies exploded since 1999, and the number reached 11,392 by the end of
     2001.

     However, the number of venture companies began to decrease since 2002. This is
     attributable to the popping of the bubble for the venture investment during 1999-
     2000 as well as the economic slowdown, which led to difficulties in securing
     funds, leading to slowdown in new start-ups. The number of venture companies
     started to increase as of 2005 and reached 10,000 in February, 2006.


 Aerospace Industry

     The Republic of Korea is deemed a semi-developed country in the global
     aerospace industry. In terms of revenues, it ranks 12th in the world excluding
     Eastern Europe.

     The market share of the Korean aerospace industry in the global market is about
     0.5%. Although it ranks 12th in the world in sales and technology, the country is
     far behind major players in the industry. Nevertheless, the fact that Korea's
     aerospace industry had a market share of only 0.08% in 1990 indicates that it is
     indeed growing rapidly.

     Nearly the entire demand of the Korean aerospace industry comes from the
     military (military aircraft). Related government agencies have formulated a plan to
     nurture the aerospace industry as a cutting-edge strategic industry of the future
     that will propel the development of the country.

     The basic thrust of such a plan is to consistently press ahead with development
     projects including the KHP (Korean Helicopter Program) and the KFX (Korean
     Fighter Experimental) and to develop components systematically in accordance
     with a technology road map to lay the groundwork for development of the
     aerospace component industry.