Global demand for chips boosts Korean presence in market as competition rises

Soaring demand for memory chips driven by AI infrastructure has significantly boosted Korea’s presence in the global semiconductor market, but mounting competition from China, United States and Japan is clouding the industry's long-term outlook.

The SK hynix headquarters in Icheon, Gyeonggi, on Jan. 23 [YONHAP]

Soaring demand for memory chips driven by AI infrastructure has significantly boosted Korea’s presence in the global semiconductor market, but mounting competition from China, United States and Japan is clouding the industry's long-term outlook.

Global revenue from memory semiconductors surged 79.3 percent in 2024 from the previous year, according to the "2025 Factbook" released by the Semiconductor Industry Association on May 27.

While logic chips, such as CPUs and GPUs, still account for a larger market share at $215.8 billion compared to $165.5 billion for memory chips, their annual growth rate was only 20.8 percent.

Propelled by this memory boom, Korea’s share of the global semiconductor market jumped to 21.1 percent last year from 13.8 percent a year earlier.

The United States remained the top player with a marginal increase from 50.2 percent to 50.4 percent, while Japan, Taiwan and China all saw declines in market share.

The semiconductor industry broadly divides into memory chips — including dynamic random access memory (DRAM), NAND and high bandwidth memory (HBM) — and system semiconductors such as CPUs and GPUs.

Korea, led by Samsung Electronics and SK hynix, holds a clear advantage in advanced memory technologies like HBM and graphics double data rate (GDDR) memory.

Rising competition

Buoyed by rising demand for high-performance memory, the memory sector is expected to remain strong through next year.

Major tech firms continue to invest in AI and data center construction despite global economic uncertainty, including U.S.-China trade tensions and tariff concerns related to U.S. President Donald Trump.

Samsung, SK hynix and Micron semiconductors [JOONGANG ILBO]

Market monitor World Semiconductor Trade Statistics (WSTS) projects global semiconductor revenue to grow 11.2 percent to $700.9 billion in 2025 and reach $760.7 billion in 2026, an 8.5 percent increase.

The memory segment is forecast to expand 11.7 percent this year and 16.2 percent next year, outpacing other segments such as logic chips, which are expected to grow 7.3 percent in 2025.

But challenges loom. Chinese memory chipmakers are aggressively expanding, while U.S. and Japanese firms are accelerating their push into high-end memory markets.

TrendForce recently reported that Chinese firms have begun disclosing market share data, signaling their growing presence.

Yangtze Memory Technologies ranked sixth in the global NAND market with an 8.1 percent share in the first quarter of this year, while ChangXin Memory Technologies placed fourth in the DRAM market with 4.1 percent.

Although their shares remain modest, industry experts say their growth is rapid.

HBM alternatives

Japan’s SoftBank and the University of Tokyo, meanwhile, have launched a new company, CyMemory, with Intel to develop next-generation, low-power AI memory as an alternative to HBM, a segment where Korea currently leads.

U.S.-based Micron is also building a large-scale HBM packaging plant in Singapore and expanding production capacity.

Micron recruited former TSMC chairman Mark Liu in March in a bid to strengthen its partnership with the Taiwanese foundry giant, especially in next-generation HBM manufacturing.

"With China becoming the center of general-purpose memory, survival in the memory business now depends on AI and customized hybrid solutions,” a semiconductor industry official said. “As global logic chipmakers pour more investment into hybrid memory, Korean firms need to move fast — developing new technology and shifting production away from standard memory to next-generation products.”

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff. BY LEE GA-RAM [paik.jihwan@joongang.co.kr]