I was reading a post on TechEye.net today, and the writer had some thought-provoking points in response to the recent escalation of hostilities between North and South Korea, and what impact the situation might have on DRAM and LCD markets. On the 24th, (according to the Taipei Times) share prices for Taiwan's nation's major PC memory
chipmakers increased, perhaps due to fears of a supply disruption from South Korean chipmakers. Although, the initial 'surge' leveled off later in the day. Of course, none of us has the crystal ball, and I would argue that there are much greater things at stake here than the price of DRAM, but, as a former business student, the forces at work in the global economy are very interesting to me.
If you share my curiosity, I encourage you to read the entire post from TechEye.net for yourself. In the meantime, here is a clip for you:
"What will happen? Many of the cogs in the electronics market are oiled by big business in South Korea: Samsung, Hynix, LG and others. It could very well have a domino effect. The KRX100 is down 29.23 points, the KOSPI is down 15.40 points and the KOSDAQ is down 4.40 points. And what of the neighbours? Japan must be worried as North Korea has shown aggression to it before. China, while historically more sympathetic to North Korea than the rest of its world, doesn't want disruption in Asia: its strength and its power is based on trade."
If you have any thoughts, comments, or insights on this situation, please comment below.
In the short-term, this country to country interdependence, that's making Korea watchers so nervous, makes all of our economies very vulnerable to conflict or other sources of disruption around the world. In the long term, such interdependence is a good thing. It makes our world smaller, closer together and hopefully someday will make wars simply too expensive and completely impractical for everyone.
The problem we have now is that there are still too many countries not included in this globalization. Granted, it's as often as not, their choice, but my belief is that the more people that we can get tightly wrapped up in this world-wide economic web, the better off we will all be.
Your comment implies that NK's sinking of the Cheonan (killing 46 sailors) and with them shelling Yeonpyong island (killing 2 marines + 2 civilians) is a justified response to SK "provocation" and "muscle flexing".
Thing are not too stable anywhere these days. Even in the U.S. there's an economic and political crisis that's making life harder for more and more of us.
As this crisis deepens the military is becoming more important, in fact central, to keeping this economic system functioning. But it's clear that the system continues to deteriorate. What next?
It's interesting how centralized much of our consumption has become. Not just in electronics, but pretty much everything. One case of salmonella can disrupt vegetables or ground beef in half the country. Problems in South Korea could disrupt how much of the DRAM supply? Of course, there is also the Middle East and oil. How much chip fab capacity would go with troubles in Taiwan?
It's a very interdependent world these days.
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