The Bank of Korea (BOK) expects the global demand in semiconductors and displays has been fueling exports and growth for the country to expand at 3 percent to 7 percent on average annually for the next five years.
“The global IT industry has bottomed out from the slump since the global financial crisis in 2008, and demand exceeding supply will drive further growth,” the bank said in a report.
Korea would benefit most from the boon as it has competitive edge in the technology of flash NAND (nonvolatile storage) memory mostly used to power mobile devices that is increasingly posing as a reliable alternative to hard disc drive to store memory in PCs and organic light-emitting diodes (OLEDs) emerging as replacement for rigid liquid crystal display panels due to demand for smart flexible devices.
Korean companies dominate the global memory chip and display market. Samsung Electronics makes up 48 percent of the dynamic random access memory market and 37.1 percent of the NAND flash market. SK Hynix is the world’s second largest DRAM maker and fifth largest in flash memory. Samsung SDS is the predominant maker for small-screen OLED, and while its local rival LG Display commands the OLED market for bigger screens like PCs and TVs.
Robust demand in electronic components has driven double-digit growth in exports for the last three consecutive months.
Strong overseas demand has also stimulated capital investment by local technology producers.
The bank expected facility investment to grow 6.3 percent - 9.5 percent in the first half and 3.3 percent in the second, compared with last year’s fall of 2.3 percent, led primarily by IT companies.
It claimed supply shortage due to spike in demand for chips to power smart applications and increasing shift to bigger TVs, and mobile OLED devices will keep up the export boon until 2022.
By Kim Se-woong
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]