SK expects deep trouble in semiconductors
A model poses with products at a Samsung Electro-Mechanic’s booth on the first day of this year’s KES fair held in the KINTEX Convention Center, Goyang, on the outskirts of Seoul, Wednesday. / Courtesy of Samsung Electro-Mechanics
By Kim Yoo-chul
The global memory chip market may tumble next year amid the continued decline in prices, the chief executive of SK hynix, the world’s No. 2 memory chip maker, said Wednesday.
“SK hynix doesn’t expect the memory chip price to sharply go up in the future,” CEO Park Sung-wook said. “The average dynamic random access memory (DRAM) chip price will go down next year. Therefore, SK hynix is preparing the worst-case scenario.”
He made the remarks on the sidelines of his participation in the first day of this year’s Korea Electronics Show (KES) at the KINTEX Convention Center, Goyang, Gyeonggi Province.
KES is the Korean version of the International Consumer Electronics Show (ICES), the world’s biggest technology fair held every January in Las Vegas.
Park did not mention whether the firm may cut spending on memory chips. Market leader Samsung Electronics plans to lower its investment in chip fabrications next year as the spending cut will help secure its bottom line.
Movements in chip prices are the key barometer to gauge the profitability of chip makers. Under stronger demand for digital devices, chip makers usually charge more, helping boost profit.
Park said the SK Group’s semiconductor affiliate has started mass-producing memory chips using the finer 20-nanometer processing technology.
“We had trouble with production yields for chips with the 20-nanometer tech. However, SK hynix is going well,” Park said.
SK hynix plans to focus on strengthening its advantages in memory chips rather than expanding its footprint in next-generation chip technology, of which its international rivals, such as Intel and Micron Technology, are interested.
“We believe next-generation memory chips improved some weaknesses that were seen in existing DRAM and NAND flash chips, therefore SK hynix’s priority is how to sharpen the advantages of memory chips,” Park said.
Questioned about the possibility mergers and acquisitions to boost its logic-chip-making prowess, Park said the company was eyeing some opportunities, although he declined to specify.
Meanwhile, the KES has continued to lose its luster because the fair is failing to exhibit “something new.”
Samsung Electronics and LG Electronics exhibited products from smartwatches and OLED TVs to washers for the fair, but there were no stunning products to wow the industry.
“Samsung and LG Electronics participate in the annual KES in tandem with requests from the nation’s trade ministry,” said an official, adding he sees a limited volume of transactions with overseas buyers at the fair. “The fair has no products, no technology and no CEOs.
“KES is good for high school students and undergraduates to understand the key technology trend. But on a business front, the show is nothing.”
Chief executives of Samsung and LG Electronics missed the fair, although Samsung Electronics Vice Chairman Kwon Oh-hyun attended the opening ceremony. The number of participants for the convention was cut to 450 from 800 last year.