Exceptionally Cold Semiconductor Winter on the Korean Peninsula... Downward Revision of Next Year's Outlook

"Global Semiconductor Sales to Decline 3.6% Next Year"
Forecast Lowered by 4.35% from July Estimate
Direct Hit to DRAM and NAND Markets

[Asia Economy Reporter Kim Pyeonghwa] As the global semiconductor downturn deepens, market research firms are consecutively lowering their semiconductor market forecasts for next year. The memory semiconductor sector, where Korean companies compete for the world’s first and second positions, is particularly bleak. There are gloomy predictions that the crisis in the semiconductor industry, which drives Korean exports, could extend beyond expectations into the second half of next year.

On the 30th, market research firm Gartner predicted that the global semiconductor market revenue next year will be $596 billion, a 3.6% decrease compared to this year’s $618 billion. This is 4.35% lower than the forecast released in July ($623.1 billion).

Gartner explained that the sluggish business conditions that began in earnest this year will continue into next year due to weak demand caused by worsening external economic conditions, increased inventory, and falling prices. In particular, the memory market, including DRAM and NAND flash, which are highly sensitive to economic cycles, could be hit directly.

The memory market revenue next year is expected to decrease by 16.2% compared to this year. Specifically, the DRAM market is forecasted to generate $74.2 billion in revenue, down 18% from this year, and the NAND market is expected to record $59.4 billion in revenue, a 13.7% decline.

Richard Gordon, Vice President of Gartner, said, "As the global economy deteriorates rapidly and consumer demand (for IT devices, etc.) decreases, it will negatively impact the semiconductor market next year," adding, "Consumer demand may shrink due to the worsening macroeconomic environment."

Gartner’s forecast for this year’s global semiconductor market revenue is $618 billion, a 4% increase from the previous year. This year, DRAM market revenue is expected to decline by 2.6% to $90.5 billion, while NAND market revenue is projected to increase by 4.4% to $68.8 billion.