AI is the biggest driving force! South Korea's semiconductor production has seen its largest growth in 14 years. Economist: AI will drive steady growth in semiconductor production

In recent years, the global semiconductor market has suffered a setback due to the impact of the COVID-19 epidemic. However, with the gradual recovery of the global economy and the rapid development of emerging technologies such as 5G, artificial intelligence, and the Internet of Things, demand for semiconductors has increased. Especially in fields such as automotive electronics, smartphones, cloud computing, and data centers, demand for semiconductors continues to increase. In addition, the recovery of the manufacturing industry worldwide is also driving the growth of the semiconductor market.

As the most important industrial sector in South Korea, the semiconductor industry is seeing signs of recovery in demand for semiconductors. On March 29, according to data from Statistics Korea, semiconductor production increased by 65.3% year-on-year in February, the largest increase since the end of 2009. Semiconductor exports also rose 59%, although this was weaker than January's 62.7%. Inventories fell 16.2% for the second consecutive month, another sign of strong demand.

Other data indicate that the country's semiconductor production may continue to grow. Chip exports in the first 20 days of March increased by 46.5% compared with the same period last year. The biggest driving force for this growth was the surge in global demand for artificial intelligence (AI)-related memory chips. SK Hynix, South Korea's second-largest chipmaker, expects its supply to Nvidia to continue to maintain positive momentum.

Economist Hyosung Kwon noted: "We expect semiconductor production to grow steadily in March, driven by strong external demand for artificial intelligence memory chips."

Looking back at the development of the global semiconductor industry from the perspective of "South Korea's semiconductor demand continues to recover."

Global semiconductor industry scale

The global semiconductor industry's market size fluctuated from 2017 to 2021. The severe decline in the memory chip market in 2019 led to a decline in the size of the global semiconductor market, and growth has resumed since 2020. According to data released by the U.S. Semiconductor Industry Association (SIA), it will reach US$555.9 billion in 2021, an increase of 26% from 2020.

Global semiconductor wafer industry scale

In 2022, driven by applications such as automotive, industrial, Internet of Things, and 5G construction, demand for 8-inch and 12-inch semiconductor silicon wafers will grow simultaneously. SEMI believes that despite deepening market concerns about the overall economy, the semiconductor silicon wafer market continues to advance; according to statistics from the International Semiconductor Industry Association (SEMI), shipments have grown in nine of the past 10 years, showing that silicon wafers play an important role in the semiconductor industry. Plays an important role in. In 2022, the global semiconductor silicon wafer shipment area will reach 14.713 billion square inches, a year-on-year increase of 3.9%.

In recent years, the global semiconductor silicon wafer industry's market size has fluctuated. Only in 2019-2020 did the market size decline. This is mainly due to Sino-US trade issues and the weakness of the downstream consumer electronics market. According to SEMI statistics, the global semiconductor silicon wafer market will reach US$13.8 billion in 2022, with a growth rate of 9.52%, an increase of US$6.6 billion from the global semiconductor silicon wafer market in 2016.

Global semiconductor equipment industry scale

As the global semiconductor market booms, demand for semiconductor equipment is also growing. The global semiconductor equipment market size will reach US$103 billion in 2021, an increase of 42.24% compared with 2020. SEMI predicts that the global semiconductor equipment market will reach US$118 billion in 2022.

The global semiconductor wafer manufacturing equipment market will reach US$62.2 billion in 2021, an increase of 40.68% compared with 2020. It is expected to exceed US$100 billion in 2022.

Ju Long, global vice president and president of China of SEMI, a semiconductor industry organization, said that the semiconductor industry experienced a downward cycle last year, and industry revenue fell by about 11%. Semiconductor sales are expected to grow by 13%-16% this year, possibly reaching US$600 billion, and are expected to reach the US$1 trillion milestone around 2030.

According to research firm IDC, global semiconductor revenue is expected to rebound to US$630.2 billion in 2024, an increase of 20%. The storage market has the strongest growth, with an increase of 52.5%. Driven by artificial intelligence (AI) equipment, computing infrastructure, automobiles, high-bandwidth memory (HBM), and chiplets, semiconductor revenue is expected to approach US$1 trillion in 2029 and grow to more than US$1 trillion in 2032.

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