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Rising demand lifts mood among Korea’s semiconductor manufacturers

10. September 2020

South Korea’s semiconductor industry is looking forward to the third quarter of this year despite the coronavirus crisis and difficult economic environment. According to information from industry representatives, demand is expected to rise, especially for memory chips used in the growing market for contactless electronic devices. Exports of semiconductors from South Korea increased by 22.6 percent in the first ten days of June 2020 compared to the previous year. This is supported by data from Korean customs.

Figures from the Korean Ministry of Industry, Trade and Energy show that in May semiconductor exports rose 6.6 percent, including both memory and non-memory chips. Exports of computer memory (DRAM) increased 17 percent year-on-year. An increase in DRAM prices contributed to the higher value of South Korea’s chip exports. The fixed price for a DDR4 8 GB memory module rose 0.6 percent to $3.31 in May. According to DRAMeXchange market observers, the price has been rising steadily over the past five months.

These confident figures suggest that Korean semiconductor manufacturers Samsung Electronics and SK hynix could report rising profits in the second quarter of 2020 after a negative first quarter result. Analysts expect that the chip industry could largely recover in the second half of the year and return to the level of six months ago. Sales of PCs and mobile devices will also increase in the third quarter as manufacturers try to make up for weak sales in the first six months with special offers and discounts. Another product for which experts predict an upturn is flash memory (NAND). Due to scarce production with higher market demand, the price could rise by about 9 percent, according to a report by NH Investment & Securities.

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MPR Author

About the author: Julian Busch is founder and managing director of MPR International GmbH
Publisher: MPR International GmbH

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