Chip market likely to improve in 2nd half of 2019, and opportunities exist: Experts
Arirang News
2019-04-10
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Korea's export-reliant economy is going through hard times as outbound shipments are falling... especially in the semiconductor sector.
Our Ko Roon-hee talked to some experts about the chip industry.... and what we can expect in the near future.
Semiconductor exports, which account for around 20-percent of Korea's total exports...continue to struggle.
The total amount of outbound shipments have been continuously decreasing on-year since December last year.
According to the trade ministry, exports decreased 16-point-6 percent last March... a huge tumble from the 44-point-2 percent increase posted the previous year.
Analysts are pointing to the the lower demand for chips due to poor smartphone sales and less investment in data centers as the reasoning behind the decline.
Data from China's government-affiliated research institute shows that smartphone shipments to China in February fell to their lowest in six years...as consumers held off on making purchases amid a slowing economy.
The ongoing trade tensions between the U.S. and China were also attributed to the lack of investment.
The decline in demand has also led to the lowering of prices.
For instance, the average selling price of one particular type of DRAM chip has been on a continuous decline since the third quarter of last year.
So when will this downturn start to recover?
An expert in the field says...chip sales are likely to pick up in the second half of this year.
"I expect that the situation will be better in the 2nd half of 2019. But we should be aware of some variables in the future. These include the negotiating process between Washington and Beijing and the development of 5G-related industries. These businesses require storage for a large amount of data...which will lead to an increase in demand of memory chips."
And in terms of what chip companies can do until then, analysts say its time to venture into other sectors outside the memory field... where most of the current investment is being made.
"Let's take a look at the example of Samsung Electronics. Due to the company's huge success in memory semiconductors, it has not invested a lot in other types such as system-on-chips. Also, fostering small and mid-sized companies capable of developing system-on-chips is important as well."
"As for the role of the government, analysts say it is crucial to secure competent Korean workers in the field…because some Chinese companies are already in the process of recruiting them.Ko Roon-hee, Arirang News."
Our Ko Roon-hee talked to some experts about the chip industry.... and what we can expect in the near future.
Semiconductor exports, which account for around 20-percent of Korea's total exports...continue to struggle.
The total amount of outbound shipments have been continuously decreasing on-year since December last year.
According to the trade ministry, exports decreased 16-point-6 percent last March... a huge tumble from the 44-point-2 percent increase posted the previous year.
Analysts are pointing to the the lower demand for chips due to poor smartphone sales and less investment in data centers as the reasoning behind the decline.
Data from China's government-affiliated research institute shows that smartphone shipments to China in February fell to their lowest in six years...as consumers held off on making purchases amid a slowing economy.
The ongoing trade tensions between the U.S. and China were also attributed to the lack of investment.
The decline in demand has also led to the lowering of prices.
For instance, the average selling price of one particular type of DRAM chip has been on a continuous decline since the third quarter of last year.
So when will this downturn start to recover?
An expert in the field says...chip sales are likely to pick up in the second half of this year.
"I expect that the situation will be better in the 2nd half of 2019. But we should be aware of some variables in the future. These include the negotiating process between Washington and Beijing and the development of 5G-related industries. These businesses require storage for a large amount of data...which will lead to an increase in demand of memory chips."
And in terms of what chip companies can do until then, analysts say its time to venture into other sectors outside the memory field... where most of the current investment is being made.
"Let's take a look at the example of Samsung Electronics. Due to the company's huge success in memory semiconductors, it has not invested a lot in other types such as system-on-chips. Also, fostering small and mid-sized companies capable of developing system-on-chips is important as well."
"As for the role of the government, analysts say it is crucial to secure competent Korean workers in the field…because some Chinese companies are already in the process of recruiting them.Ko Roon-hee, Arirang News."
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