South Korea’s Nand Flash Memory Chip Exports Show Growth

According to the results of last month, an increase in South Korean exports of Nand flash memory chips was recorded.

South Korea’s Nand Flash Memory Chip Exports Show Growth

The indicators of deliveries of these products from the Asian country showed a positive dynamic for the first time in a year. According to experts, the volumes of microcircuits exports that were recorded in September are evidence that the decline in demand for semiconductors is reaching a peak. This means that in the foreseeable future, the situation on the market of these products will improve in terms of consumer activity.

Shipments of flash memory chips from South Korea to other countries by the end of September increased by 5.6% compared to the result for the same period last year. Also, this indicator is a significant improvement in the dynamic of exports compared to the August decline at the level of 8.9% year-on-year. The relevant information is contained in the press release of the Ministry of Trade, Industry and Energy of South Korea, which was published on Monday, October 16.

At the same time, the volume of exports of dynamic random access memory (DRAM) from this Asian country in September showed a decrease of 24.6% year-on-year. But in this case, there is a positive trend of slowing the rate of decline in the supply indicator, since in August the downturn was equal to 35.2%. Dynamic RAM is one of the important components of the microcircuit memory market.

Chips of this category are the main driving force of South Korean exports. The indicator of these supplies significantly depends on the level of demand for technological products in the global market.

Nand is inferior to DRAM in terms of profitability potential, but at the same time, thanks to its ability to store data without power, it guarantees stable orders from manufacturers of devices such as memory cards, digital cameras, and other portable developments.

In the political sector of South Korea, expectations of an increase in demand for chips are currently a kind of trend. If this favorable scenario for the country is implemented, something like a base for the economic growth of the state will appear. External circumstances do not guarantee that the situation will change in the direction from which South Korea will be able to benefit from its technology industry, as experts predict that global interest rates will remain high for a long time, being a factor of pressure on overall consumption.

South Korean Samsung Electronics and SK Hynix control a significant share of the global memory market. For these companies, the recovery of demand is a direct commercial interest. If semiconductor sales show a positive dynamic, suppliers of wafers and equipment from Japan will also benefit significantly.

The volume of exports of South Korean chips to China by the end of September decreased by 22.7% compared to the result for the same period last year. The negative situation in this area was offset by an increase in the supply of products to the European Union, which amounted to 56.5% year-on-year. Also, European exports were able to reduce the negative effect of a drop in shipments to the United States, recorded at 30.5% compared to the result for September 2022.

South Korea may expand its presence in the global memory chip market in the foreseeable future. This prospect is partly because export restrictions imposed by the United States on China are making changes in the semiconductor supply chain. In the spring of this year, the Taiwanese company TrendForce predicted that by the end of 2023, South Korea’s share in the global production of microcircuits DRAM will increase to 64% after the scale of the country’s presence in this technological area has not changed in any way for several years. The firm also believes that China’s share in this industrial sector will decrease to 14%, which will mean a change from a positive trend to a negative one after a long period of growth.

Beijing is striving for technological sovereignty, directing funds to ensure what can be called industrial autonomy. According to Bloomberg Intelligence, China, which has lost access to American and European developments, will be able to make advanced DRAM chips on its equipment in five to ten years. This period is a kind of chance for South Korea to become an industry leader.

As we have reported earlier, South Korean Companies to Supply Chip Equipment to Its Factories in China.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.