Bit by Bit: A Strategic Approach for Korea in the Non-Memory Chip Market

Heewon Kyung () and Sanghoon Kim ()
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Heewon Kyung: Korea Institute for Industrial Economics and Trade, Postal: Sejong National Research Complex, Korea Institute for Industrial Economics and Trade, 370 Sicheong Dae-ro C-dong 8-12F 30147, Republic of Korea, http://www.kiet.re.kr
Sanghoon Kim: Korea Institute for Industrial Economics and Trade, Postal: Sejong National Research Complex, Korea Institute for Industrial Economics and Trade, 370 Sicheong Dae-ro C-dong 8-12F 30147, Republic of Korea, http://www.kiet.re.kr

No 23/18, Research Papers from Korea Institute for Industrial Economics and Trade

Abstract: In 2022, the global semiconductor market was valued at USD 600 billion (approximately KRW 780 trillion). Memory chips represented 23.9 percent of that estimated market, while non-memory chips claimed the remaining 76.1 percent. In the global non-memory semiconductor market, South Korea is ranked sixth, after the United States, Europe, Taiwan, Japan, and China. Much of the revenue Korean non-memory semiconductor companies generate is concentrated in the consumer electronics sector, fueled by strong domestic demand for products such as smartphones and televisions produced by large corporations. The non-memory semiconductor market is incredibly varied and complex, as the demand sectors for these chips require them for a wide variety of functions and broad performance envelope. Industries that use these chips are also far more diverse than the industries that use memory chips. The subsegments of the non-memory chip market are dominated by established players, and these niches are protected from latecomers by extremely high barriers to entry. The geopolitical landscape is rapidly shifting, with the US-China rivalry intensifying at the same time that semiconductor technologies are becoming more and more sophisticated. It is in this global environment that the Korean government is primed to pour fiscal resources into an effort to foster the domestic non-memory semiconductors industry. But in order for this kind of investment to be effective, the government first needs to objectively assess Korean companies’ position in the global non-memory semiconductor market, and execute its investment following a comprehensive and maximally efficient national strategy.

Keywords: semiconductors; chips; non-memory semiconductors; non-memory chips; system semiconductors; system chips; system semiconductors market; market analysis; US-China rivalry; investment; industrial strategy; Korea (search for similar items in EconPapers)
JEL-codes: F10 F13 F51 F52 L10 L11 L16 L60 L63 O24 (search for similar items in EconPapers)
Pages: 12 pages
Date: 2023-08-23
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