Korean semiconductor stocks are tight(electronics manufacturing expo news)

28 Jul 2019

Japan’s impact on the supply of Korean semiconductor materials continues to ferment and has threatened the normal production of Korean semiconductor giants. According to the Nikkei Chinese Network reported on July 25, South Korea's SK Hynix announced that it will be affected by Japan's policy of cut-off policy. In 2019, NAND-type flash memory electronics manufacturing expo production will be reduced by 15% compared with 2018, in order to save the use of raw materials. It is worth mentioning that this is the first time that the Korean semiconductor giant has adjusted its production plan.

1. The results of the consultations in Japan are not good.

In early July, due to Japan’s severance of three key semiconductor materials from South Korea, the supply of raw materials for the Korean semiconductor industry showed dangerous signals. In order to get rid of the dilemma, the presidents of South Korean semiconductor giants such as Samsung and SK Hynix have traveled to Japan to find ways to ensure the supply of semiconductor materials. However, from the point of view of SK hynix, they have not succeeded.

So, is the lack of raw material supply now having a fatal impact on Korean semiconductor companies? In the short term, the impact of Japan's electronics manufacturing expo confiscation on South Korean exports of semiconductors is still small, after all, semiconductor giants can still use the remaining inventory products. It is reported that SK Hynix also has 2 months of memory product inventory.

Recently, South Korean semiconductor exports have been falling for several consecutive months, and it is expected to fight for a period of time for the inventory of Korean semiconductor companies. According to South Korean official data, exports in the first 20 days of July fell by 13.6% year-on-year, and the main reason for the decline was the sharp decline in semiconductor exports. Semiconductor products are one of the top five export products in South Korea, while South Korea’s exports of electronics manufacturing expo semiconductor products dropped sharply by 30.2% in July. Prior to this, the export boom of Korean semiconductor products has been underperforming for many months.

2. Negotiations are not progressing smoothly, and the scope of the breach will be expanded.

But in any case, in the long run, Japan’s severance may eventually lead to forced production disruption in the Korean semiconductor industry. At present, Korean semiconductor manufacturers seem to be able to rely on the electronics manufacturing expo settlement of raw materials supply in the negotiations between South Korea and Japan. However, the prospects for the current consultation are not optimistic, and it has really poured a cold water on the semiconductor industry in South Korea.

According to the Korea International Radio Station (KBS), on July 24th, the General Council of the World Trade Organization (WTO) held a discussion on the issue of Japan’s breach of supply to South Korea. However, the meeting did not make positive progress and the two sides launched a fierce debate. South Korea has proposed a high-level electronics manufacturing expo dialogue to Japan, but it has not received a reply from Japan. It is worth pondering that the US representative who is considered to be able to resolve the contradictions between the two sides does not mention anything.

At the moment, the contradiction between Korea and Japan is difficult to resolve at one time, and the prospects are pessimistic. Recently, the Korean electronics manufacturing expo research institute gave an analysis, which cast a shadow over the future of the Korean semiconductor industry.

According to South Korean media Business Korea, according to the actions of Japan and Japan will remove South Korea from the white list of friendly countries, the Korean think tank Hana Financial Management Institute said that the import of Korean semiconductors and panel equipment is also very dependent on electronics manufacturing expo Japan. Japan’s cuts may be extended to these two areas, and Japan’s approach is likely to be a “one share” in the global semiconductor industry.

In the face of bilateral relations that may continue to deteriorate, how can Korean semiconductor giants solve the current supply of raw materials? It has been reported that Samsung has found companies such as China Binhua Group to replace Japan in the production of some raw materials. Not only that, but also the media broke the news that Samsung and SK Hynix may also invest in the construction of semiconductor raw material electronics manufacturing expo factories in South Korea. Despite this, for the Korean semiconductor industry, which is highly dependent on Japan, the future situation is still not optimistic.

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