SEOUL ( ChipWire) -- The semiconductor industry's revival was in evidence here this week as roughly 770 exhibitors -- 30% more booths than last year -- set up at Seoul's Convention and Exhibit Center for Semicon Korea 2000. Nevertheless, the event, sponsored by Semiconductor Equipment and Materials International (SEMI), suggested that despite a stated intent to change the mix, the Korean chip industry remains heavily dependent on the volatile memory sector.
Chip production here is forecast to reach $24.8 billion this year, a rise of 15.9% over 1999. Samsung Electronics and Hyundai Electronics said they will invest more than $3 billion in semiconductor manufacturing in 2000.
Memories account for 84% of total IC manufacturing here, and observers said South Korea still lacks the design technology and manufacturing infrastructure needed to shift to non-memory production. Industry watchers said it doesn't appear the Korean chip industry will be able to make a significant switch any time soon.
The global semiconductor industry is expected to grow to over $180 billion by 2002. The Korean semiconductor industry will keep pace, analysts said, with estimated growth of 15 to 20 percent during that period.
The DRAM market, Korea's bread and butter for a decade, is projected to reach $27 billion this year as production problems associated with Taiwan's earthquake last September continue to prop up DRAM prices 30% of GDP
Analysts said Korean manufacturers must hurry if they plan to make the transition to the much larger non-memory sector. Doing so is important, they added, because the industry accounts for more than 30% of South Korea's gross domestic product. Hence, the Korean economy is likely to ride on the ups and downs of its leading chip makers.
Korean manufacturers are increasingly aware of the need to find a balance between memory and non-memory production. Samsung, Hyundai and Anam Semiconductor all said here they would expand ASIC production based on growing demand for those chips. They also said the shift to ASIC production stems from heightened competition with Taiwan.
Efforts to boost the ASIC industry are part of a government economic strategy. For example, national institutions such as the IC Design Education Center and an ASIC design support center are helping small and midsize design firms to get on their feet.
The government has also announced a plan to boost the domestic industry's competitiveness in the non-memory business. As part of the initiative, a Consortium of Semiconductor Advanced Research in Korea is planning a collaborative effort, called System IC 2010, focusing on developing basic system IC technology.
Meanwhile, major players including Samsung and Hyundai have been working to boost long-neglected design capabilities by expanding a "designated design house" system in which device makers produce circuit designs from designated firms. Samsung has also formed an Internet business unit specifically for non-memory ICs.
The Korean manufacturers are targeting application-specific standard products, which domestic design firms will soon begin producing in volume. These ASSPs are expected to be used in information and communications devices as well as PCs and MP3 players.
The strategy also calls for developing intellectual-property cores, strengthening design technologies and establishing a database for non-memory products that the Korean IC industry could use to expand its ASIC foundry business.
The increased attendance at the Semicon show reflects the expanding global market for semiconductor equipment and materials, which conference organizers predicted will be brisk over the next several years.
--Exclusive to EE Times by Chom Dan Inc. (Seoul, South Korea)