Semiconductor market likely to improve in 2nd half of 2019: Experts
Arirang News
2019-01-25
Views 3
2019년 반도체 산업 전망은?
South Korea's economy relies heavily on exports,... and semiconductors account for around 20 percent of the total.
However, outbound shipments during the last few months paint a grim picture for the chipmaking industry this year.
Our Ko Roon-hee turned to some experts for their take on the market outlook.
In terms of exports, South Korea's new year has not gotten off to a great start.
In the first 20 days of January, exports were down almost 15 percent on year.
According to the Korea Customs Service, it's because of a fall in shipments of semiconductors,... which declined almost 30 percent.
The grim situation was reflected in the latest earnings reports from the nation's biggest chipmakers.
For instance, Samsung Electronics' operating profit in the 4th quarter fell almost 40 percent from the quarter before.
As for why the trouble for chipmakers, analysts point to two main reasons: lower demand from China and concerns of oversupply.
The ongoing trade war with the U.S. has hurt economic growth in China, and, in turn, demand for electronics.
Plus, China's smartphone market has started to stall.
There's also the problem of oversupply.
In 2017, companies drastically increased their investment in facilities for making semiconductors, which has resulted in bigger and bigger inventories.
And some investors are delaying their purchases,... waiting for prices to go down even further.
Experts say the situation is likely to improve, though, in the second half of this year.
"In the first half of the year, concerns over oversupply are likely to persist and prices will remain low. But during the second half, the peak season returns... and investors who delayed their decisions will buy, leading to an increase in demand."
Others say the situation is likely to get better with developments related to the 4th industrial revolution.
"There's 5G, A-R, V-R, I-O-T and artificial intelligence -- alot of new technologies expected in the future, but they are currently in their early stages. As time goes by, technological developments in these sectors will occur and demand for memory chips will increase."
Rather than being swayed by a temporary drop in prices, experts recommend that the industry keep developing its highly skilled workforce.
Ko Roon-hee, Arirang News.
South Korea's economy relies heavily on exports,... and semiconductors account for around 20 percent of the total.
However, outbound shipments during the last few months paint a grim picture for the chipmaking industry this year.
Our Ko Roon-hee turned to some experts for their take on the market outlook.
In terms of exports, South Korea's new year has not gotten off to a great start.
In the first 20 days of January, exports were down almost 15 percent on year.
According to the Korea Customs Service, it's because of a fall in shipments of semiconductors,... which declined almost 30 percent.
The grim situation was reflected in the latest earnings reports from the nation's biggest chipmakers.
For instance, Samsung Electronics' operating profit in the 4th quarter fell almost 40 percent from the quarter before.
As for why the trouble for chipmakers, analysts point to two main reasons: lower demand from China and concerns of oversupply.
The ongoing trade war with the U.S. has hurt economic growth in China, and, in turn, demand for electronics.
Plus, China's smartphone market has started to stall.
There's also the problem of oversupply.
In 2017, companies drastically increased their investment in facilities for making semiconductors, which has resulted in bigger and bigger inventories.
And some investors are delaying their purchases,... waiting for prices to go down even further.
Experts say the situation is likely to improve, though, in the second half of this year.
"In the first half of the year, concerns over oversupply are likely to persist and prices will remain low. But during the second half, the peak season returns... and investors who delayed their decisions will buy, leading to an increase in demand."
Others say the situation is likely to get better with developments related to the 4th industrial revolution.
"There's 5G, A-R, V-R, I-O-T and artificial intelligence -- alot of new technologies expected in the future, but they are currently in their early stages. As time goes by, technological developments in these sectors will occur and demand for memory chips will increase."
Rather than being swayed by a temporary drop in prices, experts recommend that the industry keep developing its highly skilled workforce.
Ko Roon-hee, Arirang News.
Report form
RELATED VIDEOS
