S. Korea to cement semicon leadership amid looming super chip cycle

[Graphics by Song Ji-yoon]

Semiconductors will continue to buttress export-reliant South Korean economy this year, with forecast of revival of the 2018 super chip cycle on favorable demand and price conditions.

Semiconductor exports are estimated at around $111 billion for this year, which would be 10.2 percent higher from last year and topping $100 billion for the second time in history after 2018.

According to tech research firms including Omdia, the worldwide semiconductor market is projected to grow by 8.7 percent this year, and the memory chip market by 15.5 percent.

Korea is expected to see a 12.0 percent increase in exports of DRAM and other memory this year, worth between $70.3 billion and $72.9 billion and system semiconductor exports gain of 7.0 percent to between $31.8 billion and $33 billion.

Last year, Korea’s system chip exports last year reached a record high of $30.3 billion, becoming the nation’s fifth largest export item by surpassing steel and petrochemical products. The strong export was driven by rising demand in foundry services to make 5G communication chips and image sensors.

Korea also is expected to retrieve top rank in capex in the semiconductor sector after losing its leadership to China and Taiwan in 2019. According to the Semiconductor Equipment and Materials International (SEMI), Korea’s semiconductor facility investment is expected to reach $18.9 billion this year, which is larger than China’s $16.8 billion and Taiwan’s $15.6 billion.

Amid market expectations for a semiconductor industry boom, Samsung Electronics’ market cap ballooned well above $500 billion at the end of last year, eclipsing Taiwan’s TSMC.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]