2024 Electronics and Semiconductor Industry Outlook
Display, PC, MLCC, and TV Also Rebound
Positive Earnings Signals for Electronics Industry Next Year
Not only semiconductors but also the display and home appliance markets are expected to recover next year. Optimism is growing that the effects of inventory adjustment and production cuts will fully manifest, leading to a boom phase.
According to the semiconductor industry on the 18th, the global memory semiconductor market size next year is expected to reach $131 billion (approximately 170 trillion KRW), a 66% increase compared to the previous year. This is due to the DRAM market shifting to a structure where high-value specialty sales such as High Bandwidth Memory (HBM) account for half, resulting in a ripple effect on performance improvement that is expected to be greater than anticipated.
In particular, with semiconductor supply expected to be only about half of demand next year, there are forecasts that semiconductor prices could rise significantly more than expected. Dongwon Kim, a researcher at KB Securities, explained, "Demand for DRAM and NAND next year is expected to increase by 20% compared to the previous year, but the increase in production volume (bit shipment) will be less than 10%. Due to the transition of memory semiconductor production to advanced processes and the expansion of high-value specialty DRAM proportions, production volume is expected to increase by only about 7-10% compared to the previous year."
Samsung Electronics and SK Hynix are also expected to show clear recovery in performance. Samsung Electronics' semiconductor (DS) division operating profit for next year is estimated to be around 15 trillion KRW, slightly exceeding the 2019 level (14.02 trillion KRW). SK Hynix's annual operating profit consensus for next year is also 8.3671 trillion KRW, with expectations of achieving the highest performance in three years since 2021 (12.4103 trillion KRW).
The outlook for the display market is also bright. The Korea Display Industry Association announced that the display market next year is expected to grow by 5.4% to about $122.8 billion (approximately 161 trillion KRW) compared to this year. This slight market growth is attributed to the expansion of organic light-emitting diode (OLED) applications in new markets such as IT and some demand recovery. In particular, OLED is expected to expand its applications beyond TVs and smartphones to IT and automotive sectors, with the market size projected to reach $43.4 billion, an 8.0% increase from this year. LG Display's operating profit consensus for next year is also estimated at 102.3 billion KRW, marking a return to profitability for the first time in three years since 2021.
The PC market, which has experienced severe downturns, is also expected to enter a recovery phase. Canalys forecasted that PC shipments next year will increase by 7.0% to 267.3 million units compared to this year. The market growth is expected to be driven by the influx of PCs with enhanced AI capabilities.
Multilayer ceramic capacitors (MLCC) and camera modules are also expected to grow in scale by focusing on acquiring new customers and expanding sales in the automotive sector. As automobiles adopt more IT components due to autonomous driving and electrification, this is expected to contribute to improved operating rates for companies. Consequently, the operating profit consensus for Samsung Electro-Mechanics and LG Innotek next year is estimated to increase by 42.5% and 31.0%, reaching 947.2 billion KRW and 1.131 trillion KRW, respectively.
Even the TV market, which has suffered from weak demand, is expected to gradually rebound. With major sporting events such as the Paris Olympics scheduled for the second half of next year, Omdia forecasted that global TV shipments will reach about 209.42 million units next year. This represents an increase of approximately 6 million units (2.9%) compared to this year's shipments of 203.52 million units.
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