The World Semiconductor Market to Post 13.5% Growth This Year

Digital cameras and mobile devices such as cellular phones are bringing about a recovery in the semiconductor industry.

With the introduction of high capacity product thought nanometer (nm) level minute processing, demands for flash memory chips used in digital cameras and mobile devices are skyrocketing, showing a strong recovery trend in the semiconductor market.

As the semiconductor industry revives, hopes are high for the domestic economy, as Korean chipmakers account for 40% and 60% of the world D-Ram and NAND flash chip market respectively.

A Change Regarding Major Products: Demands for flash memory chips, which work as a saving devices for digital cameras of mobile handsets, are skyrocketing and stimulating the semiconductor market.

“Flash memory chips are barely meeting 40% of its demand. Soon the major product of the semiconductor industry will shift from D-Ram to flash memory chips.” says Chang-kyu Hwang, head of the memory chip department at Samsung Electronics.

Samsung Electronics is hoping for a three trillion won profit by its strategy to increase D-Ram production to 50% and to increase production of other products including flash memory chips.

Stiff Competition for High Value-added Semiconductor Development: Due to the characteristics of the industry, chipmakers cannot decrease its supply even if market demand drops. Therefore, the product price cannot help rising and falling with great gaps.

As a solution to this, chipmakers have turned to developing high value-added products, which render higher profits. This comes from the strategy to increase market viability by producing distinctive products instead of products like any other. Because of this decision, D-Ram prices are stabilizing, for this brought about a cut in the oversupplied D-Ram production.

Tae-Han Kim freewill@donga.com