Korean system integration companies strive to expand in size, business

Samsung SDS data center in Dongtan, Gyeonggi Province [Photo provided by Samsung SDS]

Information technology subsidiaries of large companies in South Korea, which are referred to as system integration (SI) companies, are striving to create future growth engines and expand in size.

Samsung SDS Co., the information and communications technology arm of Samsung Group, unveiled its data center in Dongtan, Gyeonggi Province, on March 10 and has been emphasizing its identity as a cloud company. The data center is dedicated to ultrahigh-speed and high-capacity cloud computing required for artificial intelligence.

Samsung SDS is the only company in Korea that has the technology and capability to provide cloud service, cloud managed service, and software as a service all together, according to the company.

The new center shows the company’s ambitions to actively expand its cloud business that is currently centered on Samsung affiliates.

POSCO ICT Co., a key affiliate of Korea’s top steelmaker POSCO that provides IT services and solutions, changed its name to POSCO DX at a shareholders meeting on March 20. The move shows it is willing to expand its reach beyond the area of ICT.

[Courtesy of POSCO DX]

“We plan to expand our business further by exploring more business opportunities by advancing our strengths in the area of smart factory and smart logistics,” said an official from POSCO DX.

LG CNS Co., a subsidiary of LG Corp., is expanding its cloud-based digital transformation (DX) business. Shinsegae I&C Inc., an IT subsidiary under Shinsegae Group, also continues its investments in the electric vehicle charging business in which the company is promoting as a core new business.

SK Inc. C&C, a system integrator and service provider within the SK Group, and Lotte Data Communication Company Ltd., a key affiliate of the Lotte Group in charge of digital transformation, are creating opportunities for business-to-business transactions outside of their affiliates based on technologies in the areas of AI and cloud.

It remains a task, however, for these IT companies to reduce their dependence on transactions within their respective groups.

According to data from Financial Supervisory Service last week, 60~80 percent of the entire sales at major IT companies were from entities with special relationships such as controlling companies and group affiliates in 2022.