Semiconductor Changes: Korea to Become Game Changer in Global Semiconductor Market | BusinessKorea

Thursday, October 19, 2017

SEOUL, SOUTH KOREA
13 November 2015 - 10:00am
Cho Jin-young

Despite the recent decrease in semiconductor prices, Samsung Electronics posted double-digit growth in the global semiconductor market this year, being hot on the trail of the industry’s number one Intel. SK Hynix entered the top five list in the industry for the first time ever.

Korean companies made advances this year, though sales of the U.S.’ semiconductor makers, including Intel and Qualcomm, showed decreases. There can be a transition of power in the industry after next year.

According to the monthly report released by semiconductor market research firm IC Insights on Nov. 12, Samsung Electronics is expected to have US$41.6 billion (48.24 trillion won) of sales in the semiconductor market this year. It is combined figures in the memory semiconductor, in which Samsung Electronics has maintained its top place for 22 years in a row, and the system semiconductor and microprocessor chip sectors, in which the company is relatively weak.

As Samsung Electronics increased sales by 10 percent from US$37.8 billion (43.83 trillion won) last year, the company also ranked top in terms of the growth rate among the top five companies with the highest sales. Samsung Electronics started mass production of 48-layer V-NAND flash memory chips, and began the 14nm FinFET manufacturing process in the system semiconductor sector this year, showing unrivaled competitiveness in technology.

SK Hynix also showed good performance this year. As the company is likely to post US$16.9 billion (19.6 trillion won) in sales, up 4 percent from US$16.3 billion (18.9 trillion won), it moved into fourth place in the industry, surpassing Qualcomm and Micron. It is the first time for SK Hynix to join the top five list in the industry in the rankings released by IC Insights.

However, overseas competitors showed relatively low results. As the estimated sales of Intel this year stood at US$50.3 billion (58.32 trillion won), down 2 percent year-on-year, the gap between Samsung Electronics narrowed to US$8.7 billion (10.09 trillion won). The sales difference between the two companies last year reached US$13.6 billion (15.77 trillion won).

In addition, Qualcomm, which was considered to be the absolute power in the system semiconductor sector, is also expected to record US$15.6 billion (18.09 trillion won) of sales this year, showing a 19 percent decrease from the same period.

The advances of Korean companies stand out more when reflecting the exchange rate effects. The report said that the won this year is devaluated by nearly 7 percent against the dollar compared to last year and sales of Samsung Electronics will reach US$44.8 billion (51.95 trillion won) if the exchange rates this year are same as last year. Then, the sales gap between Samsung Electronics and Intel will narrow even further to US$6 billion (6.96 trillion won). Based on such a calculation, sales of SK Hynix will also surge to a whopping US$18.2 billion (21.1 trillion won).

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