KITA News and Reports
  • Exports of Semiconductors to Exceed $ 90 Billion This Year
    2017-09-13

    Exports of Semiconductors to Exceed $ 90 Billion This Year

     

    - Mythology of Korea’s trade, 16 percent of exports, 15 percent increase every year for 40 years -

         -  KITA’s report says that it improves competitiveness of IT products and plays a leverage role in preparing for the fourth industrial revolution ?

     

    This year's exports of semiconductors are expected to exceed the record high of 90 billion dollars as a single item. Many evaluates that it means more than quantitative expansion itself as a semiconductor is a high-value-added technology-based product that supports the competitiveness of other information technology (IT) products and also plays a leverage role in preparing for the fourth industrial revolution. 

     

    According to a report titled ‘Mythology of Semiconductor Exports and Cross-national Comparison of Export Competitiveness’ issued by the Institute for International Trade (President, Shin Seung-kwan) of the Korea International Trade Association, the exports of semiconductors rose 52 percent to 59.5 billion dollars in the first eight months of this year compared to the last year and if the trend continues at a monthly average of 8 billion dollars (the average of the past three months) until the end of the year, the annual sales will be able to surpass 90 billion dollars.

     

    This is the result of 15 percent increase every year for the past 40 years and the exports of semiconductors have taken 16 percent of Korea’s total exports this year. This year, semiconductors account for about half of the total trade surplus, contributing to maintaining a stable balance of international trade, and have been ranked number one in exports for 21 times since 1992. In addition, in terms of quality, semiconductors symbolize technology-intensive products, contributing not only to enhancing Korea's national image, but also to improving competitiveness of IT products and to preparing for the fourth industrial revolution. 

     

    As of 2016, Korea’s semiconductors accounted for 8.3 percent of the global market, ranking fifth in the world, but if it is narrowed down to memory semiconductors, the country becomes the dominant leader with 27 percent of market share. In terms of the Revealed Comparative Advantage (RCA), Korea’s competitiveness is increasing with China and Taiwan, while the United States and Japan are declining. The Export Similarity Index (ESI) is rising between Korea and China whereas it is decreasing between Korea and Japan, and Korea and the United States. It indicates that the index has reflected the sharp decline in technology gap between Korea and China. There are two to three years of technological gap only in ultra-high-density semiconductor technology between Korea and China but most of the technology gaps have been bridged to one to two years. 

     

    The report states that the successes of exports of semiconductors are the results of consistent efforts to increase the technical levels through preemptive investment and to secure efficient production and export markets by building a global value chain, simultaneously. In addition, the report analyzes that high-value-added strategy based on the differentiated technologies has played a crucial role to increase exports of semiconductors as the export price of DRAM rose more than double from 1.54 dollars in 2002 to 3.45 dollars in July this year. The report points out that in order for semiconductor to drive Korea’s exports in the future, it is necessary to increase investment in technologies and minimize manpower outflow through enhancing the incentive system.

     

    Moon Byung-ki, a senior researcher at the KITA, said “The number of South Korea’s semiconductor patents is on the decrease, while China is making massive investment in the semiconductor sector.” He also stressed “The industry should continuously make investment not only in memory semiconductors but also in system semiconductors with relatively low levels of technology and create a new growth engine through industry, government and academia collaboration in the future.”

    < Performance and Indication of Semiconductors Exports >

    < Quantitative  Performance >

    < Qualitative  Performance >

       Expected to exceed $ 90 billion as a single item (exceeding total export performance in 1993)

       Account for more than 50% of total surplus

       Account for 16% of export of a single item

       Increased to an annual average of 14.7% over 40 years

       Since 1992, ranked No.1 export item for 21 times

    As of 2016, 27% of share in

         global semiconductor market

    (Export ranking  No.1)

    high-value-added technology

    intensive  products

    Improve competitiveness of IT industry

     Leverage to prepare for 4th industrial

    revolution

    Improve Koreas national credit rating

    and brand value

     

    <Export Similarity Index (ESI) Trend of Semiconductors between Korea and Major Countries >

     

    2011(a)

    2015

    2016(b)

    Increase and Decrease (b-a)

    ESI Increase

    Korea·Chna

    57.3

    65.9

    71.0

    13.6

    Korea·China(including Hogg-Kong)

    60.8

    61.9

    66.7

    5.9

    ESI Decrease

    Korea·Japan

    53.8

    51.4

    53.0

    -0.8

    Korea·US

    71.2

    60.4

    52.7

    -18.5

    Korea·Singapore

    52.3

    56.5

    51.2

    -1.2

    Korea·Taiwan

    27.5

    26.2

    25.6

    -1.9

    Notes: Based on HS-6, Source: The writer calculated using data from WTO, UN Comtrade and Taiwan Customs Service

     

    List
    Prev
    China’s Powerful e-Commerce Jingdong Visits Korea to Seek Korean Brands
    Next
    KITA Signed MOU with Korea-Africa Center
KITA
Family Site