Not since the 1960s has Korean cinema enjoyed a boom that compares to this year. Four local features - Friend, My Sassy Girl, Kick The Moon and My Wife Is A Gangster - make up the top-grossing releases of the year to date.

The market share for Korean films in Seoul stood at 39.9% at the end of September, with figures for the nation as a whole likely to be even higher. "After the success of Friend and My Sassy Girl this year, a large number of companies decided to invest in the film industry," says Suh Youngjoo, managing director of sales company Cineclick Asia. "It's become fairly easy to secure funding for most projects."

The growth of interest in Korean films can be traced to a number of factors: strong governmental support, the expansion of local film-making technology, a generational change in the industry, and a populace that worships cinema. Ever since 1999 and the release of Kang JeGyu's Shiri the industry has been on a roll, but this year represents a new high.

This success has been followed by expanded production. Currently South Korea releases about 60 local films a year, up from a 40-year low of 41 in 1998, and in the coming years this is expected to rise. At the same time, production costs are also on the up, with films now costing $1.7m on average (including p&a costs), compared with $770,000 in 1995. The recent emergence of the Korean blockbuster has attracted interest while imbuing the industry with new diversity. The historical epic Musa, shot in China and co-starring Crouching Tiger, Hidden Dragon's Zhang Ziyi, has drawn two million viewers and secured an early sale to France.

The next few months will see the unveiling of several high-profile science fiction works. Boasting high production values and equally large budgets, the films will need strong support from local audiences as well as solid international sales just to break even. Resurrection Of The Little Match Girl, a "cyber-fusion thriller" from maverick Jang Sun-woo, who also directed festival favourite Lies, is reportedly the most expensive live-action Korean film ever made at close to $8m.

2009 Lost Memories will team local heart-throb Jang Dong-gun with Japanese star Nakamura Toru in the story of an alternate future in which Korea remains a colonial power of Japan. Other upcoming sci-fi titles include Yesterday, set in a unified Korea, Natural City, Tesla and Genocide.

Locally-produced animated works are also poised to make well-publicised debuts in the coming months. Until recently, Korea's animators worked almost exclusively on outsourced projects by foreign companies, but upcoming features My Beautiful Girl Mari, Wonderful Days and Empress Chung are poised to secure wide releases and aggressive overseas marketing. Digital Dream Studios, a major new company with seven animated films currently in production, succeeded last month in tempting the well-known director of Musa, Kim Sung-soo, away from live-action films to try his hand at the full 3D animated Lineage.

Despite the strides being made locally, many pin their hopes on overseas markets. "The local market is too small," says Park Byung-moo, president of Locus Holdings, which owns Cinema Service and Sidus Corporation. "The Korean film industry averages 60 million admissions per year. Even if that were to double, we would still feel a lack of space."

To that end, a heavy burden falls on Korea's young international sales companies, a record seven of which will be attending Mifed 2001. Among the projects they will be showcasing are several highly-anticipated films, such as Park Chan-wook's follow-up to his mega-hit Joint Security Area, a noirish thriller entitled Sympathy For Mr Vengeance, as well as Kyung-taek's next project. The success or failure of these companies to attract a wider audience for Korean cinema will likely determine the limits of growth for the film industry. With Japan established as the biggest overseas market for Korean films, sales companies are pinning their hopes for further growth on Chinese-speaking territories. "In many Chinese-speaking countries there is an emerging boom in Korean pop culture," says Suh. "Fans are crazy about Korean actors, and we hope to use that to develop a second major market for Korean films."