Korea Institute Of Industry Optimistic About Semiconductor Industry In The Second Half Of 2018

The Korea Institute of Industry (KIIA) reported a good outlook for the Korean semiconductor industry in the second half of 2018. Compared with many market research institutes and investment brokers, the DRAM boom is likely to end in 2018 and the average DRAM sales price is expected to fall by up to 25% in 2019.

Despite divergent market views on the future of memory prices, a recent report by the Korea Institute of Industry (KIIA) pointed to a good outlook for the Korean semiconductor industry in the second half of 2018, compared with pessimistic forecasts from many market research institutions and investment brokers on the future of memory, suggesting that Samsung Electronics DRAM may delay the pace of expansion, 201. The average selling price (ASP) of DRAM in 9 years is likely to decline by 15~25% compared with 2018.

The Yonhap News Agency recently quoted a report from the Korea Institute of Industry Research, pointing out that the demand for core components semiconductors has surged due to the industrial revolution of 4.0, and the overall outlook for the Korean semiconductor industry is good. The report stresses that the global situation affecting the semiconductor industry is generally quite positive. The Industrial Revolution 4.0 will help drive a surge in semiconductor demand in the future. Global supply shortages will continue in the second half of 2018.

In addition, memory prices will still maintain a certain level of high level, with the expansion of Korean memory manufacturers, export may also expand, but export growth is not as strong as the first half of 2018, the second half of 2018, Korean memory export growth rate is forecast to be 15.9%, compared with the first half of 2018 is 42.5%.

The analysis points out that the crisis factors of Korean semiconductor industry lie in excessive centralized memory and the rapid catch-up of the mainland. At present, although the mainland memory is highly dependent on imports, but by early 2019, the mainland may start to produce their own memory. At present, there is still a certain degree of technological gap between South Korea and the mainland, which will not affect South Korea in the short term. However, when the mainland begins to adopt domestic manufacturer products, it is bound to impact South Korea's export.

South Korea's small and medium-sized enterprises are mainly system semiconductors, but the Korean system semiconductors industry is relatively weak and dependent on imports, which is the South Korean semiconductor industry should strive to strengthen. In addition, for the current U.S. -China trade war in retaliation, the report points out that due to differences in semiconductor concentration between the mainland and South Korea, as well as differences in technology levels, there is no impact on the export of Korean enterprises to the mainland.

However, the report analyses that if the U.S. -China trade war continues for too long, the fear of shrinking demand for electronics from the mainland, or the decline in the export of Electronics produced by the mainland, is the biggest concern for South Korea, which relies on the mainland as a semiconductor export market.

Compared with the report of the Korea Institute of Industry, many securities investment and market research institutions have recently turned pessimistic and conservative towards the price trend of DRAM, pointing to the seemingly delayed pace of Samsung's expansion, mainly due to Samsung's consideration that if it expands production too quickly, the market may turn to oversupply, and the decline in DRAM prices will affect profits. . On the other hand, many analysis also pointed out that Samsung entered the 1x/1y nano-microminiaturization process because of technical difficulties, resulting in higher adverse rates and increased production costs, so decided to delay the expansion.

In addition, some market research institutes have predicted that although the industrial revolution of 4.0 will boost demand for some semiconductors, manufacturers will continue to move into advanced processes and expand production, DRAM prices may begin to weaken from the fourth quarter of 2008, average DRAM sales prices may decline in 2019, predicting a 15-25% decline from 2018. However, many in the Korean industry believe that considering the speed at which Samsung and SK Hynix are moving into advanced manufacturing and expanding production, the point at which DRAM average sales prices will fall is likely to fall in 2020 rather than in 2019.