Semiconductor Exports Increase 26% in Second Half of Year... "Impact of Memory Price Rise"

Hankyung Association H2 Economic and Industry Outlook Seminar
Presentation by Kim Yangpaeng, Senior Researcher at Korea Institute for Industrial Economics and Trade
Memory Market Growth Rate Expected to Exceed 70%

The scale of South Korea's semiconductor exports is expected to increase by 26.3% in the second half of the year compared to the same period last year. Factors such as rising prices of memory semiconductors, increased demand for IT devices, and accelerated transition to artificial intelligence (AI) servers are expected to drive this growth.

Kim Yang-peng, Senior Researcher at the Korea Institute for Industrial Economics and Trade, presenting the outlook for the semiconductor and electrical electronics sectors at the "2024 Second Half Economic and Industrial Outlook Seminar" held at the FKI Tower in Yeouido, Seoul on the 20th / Photo by Kim Pyeong-hwa

Yangpaeng Kim, a senior researcher at the Korea Institute for Industrial Economics and Trade, announced this forecast on the 20th at the '2024 Second Half Economic and Industrial Outlook Seminar' held at the FKI Tower in Yeouido, Seoul. The event was organized by the Federation of Korean Industries to review export and industrial outlooks by sector for the second half of the year.

Semiconductor exports in the first half surged by 48.2% compared to the same period last year. This was due to a base effect from last year's export slump and the stabilization after an initial rise in memory semiconductor prices earlier this year. This growth trend is expected to continue into the second half, supported by rising memory prices. The total semiconductor export value for this year is projected to increase by 35.9% compared to last year.

Senior researcher Kim stated, "The overall IT market growth rate this year is less than 10%, but the global semiconductor market growth rate is expected to be 16-17%. This means that the increase in prices rather than IT demand is the major factor."

He added, "When global IT companies invest in and replace (AI servers), prices will rise further," explaining, "The widespread adoption of Double Data Rate (DDR) 5, the latest DRAM standard, is contributing to an overall price increase."

This year, the global semiconductor market is expected to overcome sluggish conditions and grow significantly. In particular, the memory semiconductor market, which is highly sensitive to economic conditions, is expected to show remarkable growth.

Market research firms Gartner and the World Semiconductor Trade Statistics (WSTS) forecast the global semiconductor market growth rates to be 16% and 17.4%, respectively. The memory market is expected to record high growth rates of 76.8% and 70.5%, respectively.

Senior researcher Kim said, "According to WSTS, the global semiconductor market will exceed $600 billion for the first time this year." He also predicted, "The AI semiconductor market will grow by 30.7% compared to last year and is expected to maintain an average annual growth rate of 24.3% from 2023 to 2028."

During the Q&A session after the presentation, an audience question was raised regarding China's semiconductor self-sufficiency and its impact on the domestic industry. Senior researcher Kim responded, "China's semiconductor technology has improved significantly," but added, "Although there are concerns about how much Chinese semiconductors will replace South Korean ones, there is no need to worry about this for the time being."

He further explained, "Most of the increasing semiconductor production and exports from China are legacy semiconductors of 28 nanometers or larger," adding, "These products are made for general home appliances or simple electronic devices and are exported."

He continued, "(China) will compete more with companies like Taiwan's Nanya or Winbond rather than our companies," and added, "There is no need to worry until China properly adopts advanced equipment and starts producing high-end semiconductors."

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