Wednesday, November 13, 2019
Korea's Semiconductor Production and Export Volume Surpasses Last Year’s Level
Chip Export Revenue Falls due to Chip Price Drop
Korea's Semiconductor Production and Export Volume Surpasses Last Year’s Level
  • By Michael Herh
  • November 5, 2019, 16:25
Share articles

Korea’s semiconductor output and export volume in the first 10 months of the year surpassed that of last year.

Korea’s semiconductor output and export volume in the first 10 months of the year surpassed that of last year when Korean chipmakers enjoyed the biggest-ever boom. This is quite different from what semiconductor industry watchers predicted earlier this year –- the Korean semiconductor industry will slow down in 2019. Korea’s semiconductor exports have been on the rise for four straight months since July.

From Oct. 1 to 25, semiconductor exports added up to 2,557.2 tons, a 16.0 percent increase from 2,204.4 tons in the same month last year, said the Ministry of Trade, Industry and Energy and the Korea International Trade Association on Nov. 4. Semiconductor exports have been on the rise for the fourth straight month. This year, they decreased only in January, February, and June compared to the same month of last year. This year, the cumulative export volume hit 29,834.1 tons until Oct. 25, up 5.2 percent from 28,363.8 tons in the same period of last year. In particular, since July, exports have been posting double-digit growth every month.

As exports of semiconductors increased steadily, semiconductor production continued to rise. Semiconductor production in the third quarter of this year grew 8.3 percent from the same period of last year, according to a report from Statistics Korea. The increase eclipses 7.9 percent in the first quarter and 7.3 percent in the second quarter and a stark contrast to a year-on-year decrease of 0.7 percent in the total output of the manufacturing industry including the automobiles and machinery industries.

Industry experts attribute the increase in semiconductor output and exports to the “super-gap premium” that Korean chipmakers enjoy in the global market. They could increase exports amid semiconductor inventory adjustments by electronics companies around the world.

Semiconductor production and exports remained strong, but the value of semiconductor exports plummeted in the same period. This is attributable to a sharp drop in prices of memories including DRAMs and NAND flashes, the two flagship products of Samsung Electronics and SK Hynix. Korea’s semiconductor export revenue dropped 26.3 percent to US$78,965 million from US$107,170 million in the same period of last year.

But the amount outweighs US$78,699 million in the same period of 2017 when the “super boom" began in the global memory semiconductor industry. It also outclasses the 2016 annual semiconductor export value of US$62,228 million. As memory prices have stopped plunging recently, experts forecast that the semiconductor export revenue will increase quite significantly next year compared to this year.