A Glimpse into the Korean Semiconductor Equipment and Materials Market

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A Glimpse into the Korean Semiconductor Equipment and Materials Market

The Excitement Continues in South Korea, but after a Slight Speed Bump

By Edwin Hall, SEMI (January 2, 2008)

South Korea has emerged as the leader in the manufacture of consumer electronic products. Brands like LG and Samsung dominate the market from the latest trendy portable MP3 players to sleek mobile phones. Samsung and Hynix have invested heavily in fabs for producing large capacity memory devices. LCD and Plasma High-Definition Televisions (HDTVs) and computer monitors have made inroads into the homes of many consumers.

To advance in the marketplace, Korean companies continue to increase investments in electronic products, including sizeable investments in new fabs. Currently, eight 300 mm semiconductor volume fab lines are in production, mainly manufacturing Flash and/or DRAM memory. Nine more 300 mm fabs are scheduled to go into production in the next six years.

It is estimated that the global market for semiconductor equipment was just under $42 billion in 2007—an increase of 3% over 2006. The equipment market is forecasted to soften this year, but is expected to pick up again in 2009.

Analysts expect the semiconductor equipment market in South Korea for 2007 to grow 5.2% year-over-year, from $7.0 billion to $7.4 billion. South Korea has experienced impressive growth for the last five years. However, it appears that growth in 2008 for this region will trend with the global equipment market. Fortunately, healthy growth is expected to resume in 2009.

The global semiconductor materials market, which consists of wafer fab materials and packaging materials, is expected to grow 14% to reach $42.2 billion in 2007—up from $37.5 billion in 2006. Unlike the equipment market, the materials market is predicted to experience positive growth in 2008.

In South Korea, the semiconductor materials market has enjoyed a considerable upswing in the last four years and this trend is expected to continue. It is estimated that for 2007, the materials market will grow from $5.0 billion to $6.1 billion—an increase of 21%. Growth may continue in 2008 to $6.5 billion. This growth is driven by consumption of advanced materials such as 300 mm wafers, new photoresist technologies, packaging substrates, and green encapsulant materials.

Fab activity in Korea is expected to continue its growth spurt. In 2007, South Korea’s fab capacity was about 2.6 million wafers per month (wpm); this will increase to 2.8 million wpm in 2008. Samsung and Hynix have ramped up most of their 300 mm memory fabs to reach 80K to 110K wpm (in 300 mm). Hynix has recently converted its Fab M10 in Icheon into an 110,000 wpm 300 mm fab.

In summary, after a bump, growth will continue in the area of semiconductor equipment and materials as Korean electronic and memory manufacturers maintain their key role in developing innovative products.

Portions of this article were derived from the Fab Capacity Report, World Fab Watch, Equipment Market Data Subscription (EMDS), and the Material Market Data Subscription (MMDS). If you would like a brochure or a sample of any of these reports, please contact Edwin Hall (ehall@semi.org).