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BOK: ‘Semiconductor Industry Boom Will End in One Year’
Preparations Needed
BOK: ‘Semiconductor Industry Boom Will End in One Year’
  • By Cho Jin-young
  • April 9, 2018, 01:00
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The increase in DRAM demand is likely to slow down in the second half of 2019.
The increase in DRAM demand is likely to slow down in the second half of 2019.

 

The Bank of Korea said on April 8 that the current boom in the semiconductor industry that has been led by DRAM since the second half of 2016 is expected to continue until the first half of next year and an increase in DRAM demand is likely to slow down in the second half of next year with the growth of advanced economies slowing down.

Last year, the global semiconductor market showed a year-on-year growth of 22% to US$412.2 billion. Especially, the price and sales of memory semiconductors increased 37.3% and 64.3% from a year ago, respectively.

In the market, global IT giants like Amazon and Google increased their DRAM demand to accelerate the growth of the DRAM segment. According to experts, however, the boom is likely to come to an end next year due to a slower growth of advanced economies, facility expansion by South Korean suppliers, and complete domestic production of memory semiconductor components by Chinese companies scheduled to start in the latter half of this year.

Meanwhile, the non-memory semiconductor segment is expected to show a stable growth for the time being based on demands related to the Internet of Things (IoT) and electronic devices such as smartphones. At present, the memory and non-memory semiconductor segments account for 30.1% and 69.9% of the global semiconductor market, respectively. DRAM represents 58.7% of the memory semiconductor segment.

The South Korean economy is relying heavily on semiconductors, memory in particular. Specifically, the semiconductor industry accounted for 17% of South Korea’s total exports in 2017 and 20.2% of its total capital expenditure from the second quarter of 2016 to the second quarter of 2017.