Semiconductor sector goes from hot to blazing

Home > Business > Industry

print dictionary print

Semiconductor sector goes from hot to blazing

 
Semiconductor exhibition held at COEX, Gangnam in October 2020. [YONHAP]

Semiconductor exhibition held at COEX, Gangnam in October 2020. [YONHAP]

 
Semiconductor exports saw one of their best performances ever last year, second only to 2018, despite the pandemic and U.S.-led sanctions on a major buyer, Huawei.  
 
Even sharper growth is expected this year with recovery of the global economy from the pandemic, possibly leading to a so-called super-cycle, marked by high prices, as last happened between 2017 and 2018.
 
According to the Ministry of Trade, Industry and Energy and the Korea Semiconductor Industry Association on Tuesday, Korea’s semiconductor exports grew 5.6 percent year-on-year to reach $99.2 billion in 2020.  
 
That’s the biggest figure since 2018, when Korea shipped a record $126.7 billion in computer chips.  
 
In the last four months of the year, the growth rate was in the double digits.
 
While global demand for mobile devices including smart phones is weak, demand for laptops and chips for computer servers is robust as people work from home because of the coronavirus.
 
The government particularly noted an increase in system semiconductor exports, which the Moon Jae-in administration has been promoting as a promising area of business. System semiconductors include processors, image sensors and even the foundry business, which is manufacturing non-memory chips for outside customers. It is a much bigger market than memory chips, more profitable and less volatile. 
 
Last year, exports of system semiconductors hit a record $30.3 billion. The previous record was in 2018 — $26.5 billion.  
 
System semiconductors on their own now rank among Korea's top five export items, surpassing traditional categories such as steel and petroleum products.
 
This year, exports of all semiconductors are expected to grow 10.2 percent to $109.3 billion, according to the government and the Korea Semiconductor Industry Association.   
 
Memory chip exports are expected to surge 12 percent to $71.6 billion. Thanks to rising demand for 5G telecommunication chips and image sensors, system semiconductor exports are expected to grow 7 percent to $32.5 billion.
 
These projections were based on growth forecast of various institutions including the IMF as well as the Organisation for Economic Cooperation and Development (OECD), which expects this year’s global economy to grow around 5 percent.
 
The World Trade Organization expects global trade to grow 7.2 percent, a turnaround from a 9.2 percent contraction estimated in 2020.  
 
As a result, the global semiconductor market is projected to grow between 8 and 10 percent over last year. The memory chip market is expected to grow between 13 and 20 percent.  
 
The Korean semiconductor industry this year is projected to increase its investment 20.4 percent compared to last year’s to $18.9 billion.  
 
“Last year despite Covid-19 and [global] restrictions against Huawei, the semiconductor industry led Korea’s export recovery and buoyed our economy,” said Minister Sung Yun-mo. “Semiconductors this year will not only lead the growth of exports and the economic recovery but also hasten the success of the Korean New Deal and the digital transition.”  
 
BY LEE HO-JEONG   [lee.hojeong@joongang.co.kr]

More in Industry

Hyundai Motor expected to see big profit boost this year

PoongLim syringes may increase Covid vaccine efficiency by 20%

FKI head congratulates Biden, calls for 'restoration of open trade'

Retail law revision threatens small retail businesses

Rechargeable battery exports rise for fifth year in a row

Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)

What’s Popular Now