A Glimpse into the Korean Semiconductor Equipment and Materials Market
by Edwin Hall, Sr. Business Development Manager
Only a few years ago, consumers were focused on electronic products from Japan.Then came Korea. Korea has grown significantly as a manufacturer of consumer electronic products. Brands like LG and Samsung began capturing the hearts and minds of many electronics consumers. These companies started producing the latest trendy gadgets from sleek mobile devices to full-function digital cameras to compact and versatile media players.
To advance in the marketplace, Korean companies increased investments in electronic products, including sizeable investments in new fabs. There are over 50 semiconductor fab lines, ranging from discrete to advance memory device production, that are currently in operation in Korea. Korea is a leading market for 300 mm wafer production.
It is estimated that the global market for semiconductor equipment will grow to just under $41 billion in 2006—an increase of almost 24% over last year. This would surpass the $37 billion reported in 2004 and would make it the second best year for the equipment market industry. The equipment market is forecasted to grow several percentage points in 2007.
For Korea, the semiconductor equipment market in Korea is expected to gain almost 20 percent Y/Y (from $5.83 billion to $6.98 billion) – Korea has experienced impressive growth for the last 3-4 years. It is expected that Korea will continue to expand in the equipment market for the upcoming years.
For the global semiconductor materials market, which consists of wafer fab materials and packaging materials, it is forecasted to grow 14% from $31.5 billion (2005) to $36.1 billion (2006). This will be the fifth consecutive year that this market segment has seen positive growth. Similar to the equipment market, the materials market is predicted to experience positive growth for the next two years.
In Korea, the semiconductor materials market has enjoyed a considerable upswing in the last two years and is expected to continue this trend. It is forecasted that for 2006, the materials market will grow from $4.4 billion to close to $5.2 billion—an increase of 18.1%. It is predicted that growth will continue in 2007 to $5.8 billion—an increase of 11.5%. This growth is driven by consumption of advanced materials such as 300 mm wafers, new photoresist technologies, packaging substrates and green encapsulant materials.
Another positive sign is that more fabs will be constructed in the next two years. Korea’s fab construction plans in the next 18 months will involve a total of 11 fab lines with an estimated construction spending of over $2.5 billion. These fabs include Dongbu Electronics (Fab 2 – Module 2): Q2 ’07, AUK Corporation (A3): Q1 ’07, AUK Corporation (A4): Q4 ’07, and Samsung (Line 17): Q1 ’08.
The Korean semiconductor equipment and materials market will be intriguing to watch as it continues to produce more and more innovative products. Growth will continue in the area of semiconductor equipment and materials as Korean electronic manufacturers maintain their key role in developing innovative products.
Portions of this article were derived from FabFutures, SEMI Worldwide Semiconductor Equipment Market Statistics (WWSEMS), and the Material Market Data Subscription (MMDS). These reports are essential business tools for any company keeping track of the semiconductor equipment and material market. Additional information regarding this report and other market research reports can be found at www.semi.org/marketinfo.