Semiconductor - Secure base in Chinese market

Main domestic semiconductor manufacturers bet their fate on Chinese market for memory semiconductor in the second half of this year.

In China, as the demand for personal computer increases by 20% every year, the volume of the market for memory semiconductor extends exponentially. That is highly contrasted with the static situation of US and European markets by economic deflation.

It is estimated that more than 10 million units of personal computers will be sold in China in this year and China will be emerged as the core of world semiconductor market within 4 to 5 years.

Under the market situation, Hynix and Samsung Electronics have plans to launch aggressive market strategies. At the moment, Hynix holds 60% shares of Chinese semiconductor market, and Samsung Electronics expects that high quality semiconductor market is created.

▽China emerges as a core of semiconductor market= 70% of D RAM manufactured by domestic manufacturers is used for PC. Therefore, the trend of PC market has very influential power on D RAM industry.

If more than 10 millions of PC are sold in China, 400 millions of D RAM (128 mega products) are required as components. In monetary term, it is worth of 1.6 billion dollars and 7% of world market.

According to experts on computer, only 3% of the population is using PC in China and the rate will be double by year 2005. Under the situation, China is expected to appear as one of the three memory semiconductor markets with US and EU.

▽market strategies for Chinese market= Hynix suffering from financial difficulties hopes the growth of Chinese market will be a turning point. Hynix has a plan to reinforce its brands well known in Chinese market; Regend, Founder and Tungfang and maintain the market share.

Samsung Electronics established Shanghai Samsung Semiconductor Co.(SSS) in Shanghai, China in the last year, and its domestic operation department will establish a team specialized in Chinese market.

Jeong-Hun Park sunshade@donga.com