Semiconductor Investments in Korea

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Semiconductor Investments in Korea

By Dan Tracy, senior director, SEMI Industry Research and Statistics

Investments in Korea have increased steadily over the past decade, especially given the strength of Samsung and Hynix in the memory market. Since 2002, installed 300 mm capacity in Korea has increased sharply, and currently 9 percent growth in 300 mm capacity is forecasted for 2011 and possibly another 10 percent or more growth in 2012. Installed 200 mm capacity did decline in 2008 and 2009 as memory manufacturers (not only in Korea) curtailed 200 mm production capacity.

Source: SEMI, World Fab Forecast - Dec 2010

Total spending on equipment and materials (covering both frontend and backend) in Korea will likely top $14.5 billion in 2010 and is currently estimated to increase to $14.7 billion in 2011 and to over $15 billion in 2012. With the strong investments in 300 mm fab capacity, spending on the frontend is the largest portion of this spending in Korea.

Backend-related investments are significant too because of the advanced packaging and test needs for memory and also the presence of leading packaging and test subcontractors in Korea. Total spending on backend equipment — both assembly & packaging and test — could be in the range of US$1.0 billion in 2011. Packaging materials, including substrates, leadframes, packaging encapsulants, and other, is a $2.4 billion market in Korea.

Source: SEMI, Equipment Market Data Subscription - Dec 2010

Source: SEMI, Materials Market Data Subscription - Dec 2010

In addition to the above spending, it is estimated that total investments for LED production in Korea will be in the range of $550 million to $600 million in 2011. As manufacturers in Korea are important industry leaders, this market will be a top region in terms of equipment and materials spending in 2011 and beyond.

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December 7, 2010