Semiconductors growth driven by big manufacturers

Thanks to the huge investments of two among the primary manufacturers of semiconductors in the world, South Korea scored a significant growth in the production of these components.

South Korea was the second manufacturer of semiconductors in the world until 2014; besides that, it ranked second in the global production of electronic components, too. In 2015, the situation changed: China surpassed Korea in semiconductors, without anyway succeeding in preceding it in the total of the component sector until now.

Manufacturing and manufacturers

Comparing the data concerning 2015 with those referred to 2013, we can notice a global 13.5% increase for the Asian nation. In the only semiconductors, which are the most important category also here, as everywhere, the growth was by 9.3% only while the rise was instead by 20% for passive and the others. They are, however, rounded-off values for the two last categories and then the indicated percentage has just a relative meaning.

In South Korea are headquartered two of the leader semiconductor manufacturers: Samsung and Hynix Groups, which in 2015 represented respectively 12.4% and 5.1% of the world production. Besides them, some plants of US Groups operate here and various minor local companies. Among them, the most important are DongbuHiTech and MagnaChip.

Sector plants are mostly concentrated in the two regions of Gyeonggi-do and of Chungcheong-do.

In 2015, the two leaders started a series of new investments. Samsung is enlarging the current plants, with a spending of about 9 billion dollars and has destined further 14 billions to the building of a new factory, whose construction started in 2016. In its turn, Hynix has announced the project of a new plant involving an investment of 12.6 billion Dollars.

In 2015, the South-Korean production of electronic components represented 19.5% of the world one; semiconductors reached 17.6%, passive 29.3% and the others 20.8%.

In terms of typology, it is worth noticing that the South Korean production of semiconductors consists of memories by 67%, in particular DRAM and NAND.

Consumption

South Korea ranks fourth in the world in the consumption of electronic components, with the 16.9% incidence on the total, preceded by USA, China and Japan. Its incidence in semiconductors is by 15.5%, in passive by 24.4% and in the others by 13.9%. It is anyway worth reminding that, while for semiconductors we are referring to official data released by Wsts, evaluations are approximate for passive and the others.

In the biennium considered here, the South-Korean consumption grew by 15.8%, therefore exceeding the world average that was by 11% approximately.

The approximation of this figure is due to the uncertainty of the data concerning the “other” components – electromechanical, printed circuits and others – for which surveying criteria are not univocal among the various sources.

According to some news released on the sector press, among the application sectors stand out “Data processing” and “Communications”, with incidences respectively by 34% and by 23% on the total. The automotive industry constitutes around 20% while the consumer electronics sector (which in the ranking includes also white goods) accounts for 13%. The presence in Korea of the two big manufacturers of household appliances, Samsung and LG, shares in this percentage, surpassing the one achieved in the majority of other Countries.

The remaining 10% of electronic components is subdivided among the other industrial sectors; the production of electro-medical instruments and armaments holds particular relevance.

Prospects

The world market of components currently lives a phase of very modest growth. In spite of that, in 2015 both the South Korean production and consumption scored a growth roughly corresponding to the one we hypothesized in our previous article on the matter.

For 2017, Wsts foresee the 3% rise in the world consumption of semiconductors. Concerning South Korea, anyway, the general situation and the investments in course induce to foresee at least a double increment rate for this component. The trend of the other two types should be equivalent.

Production and consumption of electronic components in south korea in 2015 (billions of Dollars)

Sources: KSIA (Korean Semiconductor Industries Association), Passive Component Industry Magazine

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