[The Worst Semiconductor Winter] 6 out of 10 Experts Say "Crisis Until the Year After Next... The Most Severe in the Last 10 Years"

Domestic Experts' Industrial Economy Perception Survey
59%, "Crisis Will Persist Even After 2 Years"

[Asia Economy Reporter Choi Seoyoon] Six out of ten domestic semiconductor experts foresee that the current crisis in the semiconductor industry will continue beyond 2024. They also diagnosed that the domestic semiconductor industry is facing the most severe crisis in the past decade.

According to a survey conducted on August 5 by the Korea Chamber of Commerce and Industry targeting 30 domestic semiconductor experts regarding their perception of the semiconductor industry’s market conditions, 76.7% of respondents evaluated the current situation as a crisis (56.7% said the early stage of the crisis, 20% said the middle of the crisis). The proportion of those who said it was just before a crisis was 20%, and only 3.3% responded that it was not a crisis situation.

In fact, semiconductor exports in August contracted for the first time in 26 months (-7.8%). Prices of DRAM and NAND flash have been declining for several months. Market research firms predict that memory semiconductor prices will fall by more than 10% in the third quarter compared to the second quarter. Kim Yangpaeng, a senior researcher at the Korea Institute for Industrial Economics and Trade, said, "Risks such as semiconductor oversupply, price drops due to decreased global demand and increased inventory, rapid technological catch-up by China, and intensified US-China technological hegemony competition are occurring simultaneously, increasing uncertainty in the semiconductor industry."

Among experts, 58.6%, more than half, predicted that the current crisis situation will "continue beyond the year after next." This was followed by "until next year" (24.1%), "until the first half of next year" (13.9%), and "until the end of this year" (3.4%).

Many also believed that the current crisis in the semiconductor industry is the most severe in the past 10 years. Experts who responded that the current situation is more serious than the periods of domestic semiconductor industry downturn in the past decade, such as China’s entry into the memory market and the US-China trade dispute, accounted for 43.4%. Those who said it was "similar" accounted for 36.6%, and those who said it was "better" accounted for 20%.

In 2016, the year when China entered the memory semiconductor market and the THAAD incident occurred, the export growth trend was broken for four years. In 2019, semiconductor exports decreased by about 26% compared to the previous year (from $128.1 billion to $95.2 billion) due to the US-China trade dispute and the global semiconductor downcycle.

Professor Beom Jinwook of the Department of Electronic Engineering at Sogang University expressed concern, saying, "If past fluctuations in the semiconductor industry were mainly due to temporary external environment deterioration and semiconductor cycles, this phase is characterized by supply chain competition between major powers with an unknown end and concerns about China’s rapidly advancing technological catch-up day by day. The industry’s sense of crisis and anxiety is greater than ever."

This content was produced with the assistance of AI translation services.