The semiconductor industry, which accounts for some key Korean exports, is back on track and headed for bumper times. Semiconductor prices have been bullish even in December, a month of traditionally low demand, while corporate demand for replacement PCs is expected to go along with the global economic recovery next year.
Samsung Electronics and Hynix are expected to post better fourth-quarter results than predicted. Stock market insiders say Samsung Electronics will easily achieve an operating profit of more than W2 trillion (US$1=W1,176) and Hynix of more than W600 billion for the quarter.
Next year's prospect is even brighter. Companies that delayed replacing old PCs due to the recession are expected to replace next year, with sales of some 315 million PCs forecast, up 13 percent year-on-year.
Demand for new DRAM chips will increase as PCs need DRAM with a capacity of more than 4GB to make the most of Windows 7, the new Microsoft operating system released in October.
DRAMeXchange, a global provider of market intelligence, predicts that the DRAM capacity per PC will increase by about 15 percent from 2.52GB this year to 2.92GB next year.
It also predicted that total investment in facilities in the DRAM industry will reach US$7.85 billion next year, up a whopping 80 percent from this year, and that high demand could lead to a shortfall. Demand for flash memory chips will also rise as smartphones become more sought-after.
Semiconductor makers are resuming investment they had put on hold. Japan's Toshiba, the world's second largest NAND flash chip maker, has announced a plan to expand the production capacity of flash memory plant by more than 40 percent with an investment of up to 100 billion yen in the first half of next year.
Japan's Elpida, the world's third largest DRAM maker, decided to invest 60 billion yen next year, up 50 percent on-year. Elpida also plans to mass-produce next-generation 40-nano DDR3 DRAM chips, which only Samsung Electronics and Hynix are so far producing.
But Samsung and Hynix are expected to widen their head start by investing more than their overseas rivals. Announcing third-quarter results, Samsung said it plans to invest more than W5.5 trillion next year, while Hynix on Thursday said it plans to invest W2.3 trillion in facilities next year.