Semiconductor export prices hit 30-month high

Korea’s export price index of semiconductors hit 48.79 last month, reaching the highest in more than two years, according to the Bank of Korea on Monday.

Last month’s price index of semiconductors was a 14.2 percent increase compared to December last year and marked the highest since December 2014 when it stood at 49.05. According to the BOK, the price hike is attributed to global rising demand for Korean chips.

Exports of flash memory chips, widely used in smartphones, increased by 1.9 percent in June compared to the previous month. The data also showed that dynamic random access memory chips — used in digital electronics such as computers — rose by 0.5 percent last month.

In its recent economic outlook report for this year, the BOK predicted the country’s semiconductor exports would continue to boom on the back of increasing demand as the world’s fab spending is reaching record levels. The semiconductor memory market is also expected to grow at an annual rate of 3 to 7 percent over the next five years, according to the bank’s forecast.

IC Insights, a semiconductor market research firm, predicted the semiconductor market would account for roughly 28.2 percent of the global electronics market this year.

According a report by Semiconductor Equipment and Materials International last week, Korea is on pace to become the world’s top investor in semiconductor equipment this year as well as next year.

According to the report, an estimated $49.4 billion will be spent on global fab equipment this year, an increase of 19.8 percent compared to 2016. The figure also exceeds the previous record of $47.7 billion, which was set in 2000.

The report also predicted this year’s record will be broken again next year by some 7.7 percent, as spending is estimated to reach $53.2 billion.

As for Korea, the country’s fab equipment investment this year has been estimated at $12.97 billion, a 68.7 percent increase compared to last year. Korea’s investment also currently outpaces that of Taiwan, which had been the world’s leading fab investor over the past five years.