In December of last year, domestic semiconductor exports recorded the highest annual growth rate yet. The prices of memory semiconductors, the main export products of Samsung Electronics and SK hynix, have consistently been on the rise.
According to the Ministry of Trade, Industry, and Energy on Jan. 1, semiconductor exports in December of last year reached US$11 billion, marking a notable 21.8 percent increase compared to the same period the previous year. Semiconductor exports had been consistently declining since August 2022, but in November of last year they rebounded with a 12.9 percent increase, signaling a turnaround after 16 months. With two consecutive months of positive growth, it appears that the industry concluded 2023 on a high note.
The prices of memory products, specifically DRAM and NAND, have also been steadily increasing. According to the global market research firm DRAMeXchange, the average fixed transaction price for PC DRAM general-purpose products, featuring 8GB DDR4, stood at US$1.65 in December, reflecting a 6.45 percent increase from November. After more than two years of decline, DRAM prices successfully rebounded in October of last year, experiencing three consecutive months of growth. During the same period, the prices for NAND general-purpose products, including memory cards and USB devices with a capacity of 128 GB using 16Gx8 MLC technology, also continued to rise.
This is largely attributed to major suppliers reducing their production volumes. In the early part of last year, the memory industry initiated a reduction in wafer input as a measure to cope with a sharp decline in demand. As a result, the inventory gradually diminished, and currently there is a trend of major demand sources placing orders once again.
The expansion of the generative AI market is further contributing to the demand for memory semiconductors. U.S. companies such as NVIDIA and AMD are incorporating high bandwidth memory (HBM), produced by SK hynix and others, into graphics processing units (GPUs) designed for AI computational tasks. The HBM market, which involves bundling multiple DRAM modules to enhance data transfer speeds, is expected to grow significantly from US$1.5 billion last year to US$5.6 billion in 2025, representing a 3.7-fold increase.
The emergence of “on-device AI,” which allows devices like smartphones and PCs to perform AI tasks without network connectivity, is becoming a positive trend. Starting with the release of the Samsung Electronics smartphone Galaxy S24 in the middle of the month, AI functionalities will be incorporated into devices like the Apple iPhone 16. Kim Dong-won, a researcher at KB Securities, said, “AI features are not only spreading to smartphones but also across various aspects of daily life, including PCs, home appliances, and automobiles. This trend is expected to lead to a sharp increase in demand for customized AI semiconductors.”
Reflecting such optimism, Samsung Electronics’ stock price surged to 78,500 won (US$60.43) as of the last trading day of 2023 on Dec. 28, marking a substantial 41.9 percent increase compared to the beginning of the year. During the same period, SK hynix recorded a whopping growth rate of 88 percent.