[Inside Chodong]A Semiconductor Powerhouse Unable to Forecast the Market

Despite Korea's Memory Semiconductor Dominance,
Industry Still Relies on Overseas Market Research Firms

[Asia Economy Reporter Park Sun-mi] "Even though two Korean companies dominate more than half of the global memory semiconductor market and hold the world's number one position, the trends in prices and market outlooks for memory products such as DRAM and NAND flash still rely on overseas market research firms."

An executive in the semiconductor industry expressed regret about the current status of Korea's semiconductor industry, often described with terms like 'powerhouse' and 'super-gap,' saying, "There is no institution that can properly forecast the market, or even exist to do so." Although companies hold the top one and two positions globally and possess outstanding semiconductor technology, there is lament over the reality that no proper analytical institution exists to analyze, predict, and guide the market.

On the surface, no country is as passionate about semiconductors as Korea. Both Samsung Electronics and SK Hynix rank within the 'Top 3' by market capitalization, and Samsung Electronics has the largest number of small shareholders domestically, with 5.6 million, earning it the nickname 'national stock.' With the semiconductor stock boom, even people who previously knew nothing about semiconductors can now somewhat understand 'what semiconductors are.' The newly inaugurated government has also placed semiconductors as a top priority in industrial policy, urging continuous upgrades and active investment and nurturing. The Ministry of Science and ICT appointed Lee Jong-ho, a scholar in the semiconductor field, as minister.

However, upon closer examination, there is no specialized institution that can properly 'interpret' this field. Since there is no institution capable of thoroughly analyzing and announcing memory semiconductor price trends and market outlooks, the government, securities firms, media, and even companies operating in the industry rely on the information and analysis capabilities of overseas market research firms such as IC Insights (USA), Omdia (UK), TrendForce (Taiwan), and DRAMeXchange (Taiwan).

Since semiconductors are an advanced industry directly linked to national security, even independent market research institutions inevitably produce analyses and forecasts that may be unfavorable to Korea at critical moments. Some might say, "Who cares who makes the market forecasts?" but in the memory semiconductor sector, where Korea has particular strength, prices are highly sensitive to economic cycles and market supply-demand conditions. If market sentiment is distorted, it can lead to losses.

The situation is similar in the smartphone sector. Samsung currently holds the number one position in the global smartphone market. Considering that LG once reached third place in global market share, Korea was undeniably a smartphone powerhouse. However, global smartphone sales status, forecasts, and market share analyses are all handled by overseas market research firms such as Gartner and Counterpoint Research.

Since the government has selected 'semiconductor industry development' as one of its national agenda items, the time has come to establish a proper market forecasting and analysis institution through public-private cooperation. We can no longer leave the evaluation and forecasts of the fields we excel in to others and be led along. We need a role that can set the agenda and lead the flow in the global market in areas where we excel. It is time for the government to join forces with private companies in research and development (R&D) and research fields to become a true semiconductor powerhouse that leads the market, not just a semiconductor powerhouse strong in 'manufacturing' alone.