Korea’s Competitiveness in Memory Semiconductor Has
Proliferation of 5G service will be a turning point… need to keep
in check on China and respond to the US-China disputes -
An analysis suggests that Korea has a robust global
competitiveness in memory semiconductors and the country will be able to take
another leap forward when 5G mobile communication-based services are expanded.
According to a report titled ‘Competitiveness, Opportunities
and Threats of the Korean Semiconductor Industry’
issued by the Institute for International Trade of the Korea International
Trade Association on April 2nd, Korea's memory semiconductor
industry has a firm competitive edge despite its recent sluggish export.
Korea currently takes up 63.7 percent of the global memory
semiconductor market and its technology is far ahead of China and other
countries where the followers will not able to catch up in a short term.
Although the Chinese government has invested heavily in order to increase the
self-sufficiency rate of memory, the technology level is still years behind
Korea, and mass production is also failing. Their chase is slow as the cost for
microfabrication process is greatly increased.
In the system semiconductor industry, the sales volume of the
foundry sector of consigned manufacturing rose from 4th place
in the world in 2017 to the second place in the world last year, and the
manufacturing capacity accumulated in the memory field shines in the system
sector as well. However, the fabless sector specialized in design without
manufacturing facilities is lagging behind the United States, Japan, Europe and
China. Since Korea’s system semiconductor industry occupies about half of the global
semiconductor market, active investment is urgent.
The report selected the proliferation of killer apps that will
dominate the markets all at once in 5G, autonomous cars, Internet of Things
(IoT), and high-definition streaming as an important opportunity to rebound the
stagnant semiconductor demand. When the 5G service proliferates, not only the
amount of produced data will increase exponentially but also new semiconductor
demand for new services will increase and it will be a breakthrough for Korean
semiconductor companies. In the system sector, where Korea is a latecomer,
opportunities can arise in places where no one is preempted, such as the app
processor (AP) market for automobiles, rather than the mobile AP market, which
is already dominated by the United States.
* World Mobile Traffic Outlook (Cisco, 2019, EB/Month): (‘17)12 → (‘18)19 → (‘20)41 → (‘22)77
Kim Kun-woo, a researcher at the Institute for International
Trade of the Korea International Trade Association, stressed, "In order to
complement the weaknesses of the Korean semiconductor industry and respond to
the threats, it is important to reduce the reliance on the overseas
semiconductor supply chain by fostering the domestic semiconductor design
sector and increasing the self-sufficiency rate of the equipment and materials
sector, along with diplomatic efforts to minimize the damage caused by the
US-China trade conflicts.”