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Korea's electronics sector awaits solid year

Posted: 01 Jan 2007 ?? ?Print Version ?Bookmark and Share

Keywords:NAND? memory? flash? Samsung Electronics? Korea IT exports?

Before 2006 ended, the International Monetary Fund (IMF) gave a less optimistic outlook for the South Korean economy. It warned of a lackluster economic performanCE in view of the slump in Asian electronics brought about by lower consumer electronics (CE) consumption in China and reduced margins.

However, industry reports revealed a strong showing for IT components for most of 2006, boosting the country's total export performance. January-August figures provided by the Ministry of Information and Communication (MIC) and the Institute for Information Technology Advancement (IITA) showed an overall growth rate of 11 percent for IT component exports, surpassing those of cellphones (1.3 percent) and DTVs (10.6 percent).

Total IC exports in the January-August period amounted to $22.8 billion, up 10.5 percent from year-ago levels. Exports of memory chips, on the other hand, reached $10.2 billion, slipping 4.3 percent from the previous year due to price reductions and oversupply. Still, the memory chip sector is expected to thrive on a bullish NAND flash outlook and a promising DRAM market. Samsung Electronics Co. Ltd is optimistic about the future as it builds on its achievements in 2006. Using 40nm process, Samsung developed a 32Gbit NAND flash device with Charge Trap Flash (CTF) technology, which can be used in 32Gbyte and 64Gbyte Compact Flash cards. The CTF-based NAND can be refined down to 20nm at the 256Gbit level and can enter the tera level in 2011.

Samsung is also planning to mass-produce the world's first 512Mbit phase-change RAM (PRAM) device in 2008.

The big picture
In the realm of digital CE, large displays will continue to be a hit, as shown by Samsung's 102-inch PDP TV. Samsung Corning Co. Ltd, on the other hand, is working on eighth-generation LCD glass substrates (2.2-by-2.5m) for production. As LCD applications expand from PC monitors to TVs, the import and export of TV-panel-related products will continue to grow.

OLED is another technology that is expected to make waves in the display arena. The industry anticipates various OLED formats in 2007.

Using Super Grain Silicon (SGS) technology, Samsung SDI Co. Ltd introduced in late 2006 the world's first 4.3-inch AMOLED display designed for digital multimedia broadcast (DMB) terminals and portable media players. Despite the two AMOLEDs attached to its front and rear portions, the company's Dual-Slim AMOLED display is only 1.62mm thick. Samsung SDI also released 2.2-inch AMOLED autostereoscopic 3D displays and 17-inch AMOLED TVs.

Meanwhile, cellphones, car navigation units and next-generation portable audio players will drive the demand for NAND flash, with industry observers anticipating three years of prosperity for the market starting in 2007. The upbeat scenario began in 2006, as about 500 million cellphones shipped came with NAND flash chips. Meanwhile, Samsung expects the market for 40nm NAND flash devices to reach $50 billion in a span of five years starting in 2008.

The outlook for DRAM is also rosy. The transition to DDR2 has accelerated, with gaming consoles requiring high-cost graphic DRAMs. The introduction of Windows Vista will also serve as a growth engine for the DRAM market in the future.

The DRAM market in 2006, according to an iSuppli forecast, will reach $28.6 billion and will set the stage for a strong performance in 2007. The next two years will also see remarkable growth.

WiBro together with DMB will offer rich opportunities for local chip developers in 2007.

Great expectations
Meanwhile, IT-SoC's team manager Min-Young Lee said that the outlook for CMOS image sensors and multimedia chips for handsets will remain bullish. South Korea's design companies will make great strides in the future as demand for IC solutions for broadcasting, communications, WiBro and terrestrial DMB terminals continues to grow. More and more IC design companies with more than 100 billion won in total annual sales are emerging, posting a CAGR of 30 percent. Lee, however, notes that most design companies in South Korea are small-scale enterprises. "Taiwan companies such as MediaTek, Novatek and Sunplus Technology have more than 1 trillion won in total sales," Lee said. "For one to be a global company, over 1 trillion won in total sales is required. Total sales of South Korea's top-tier IC design companies such as Core Logic and Mtekvision are still less than 200 billion won. Focus should be on increasing overall sales."

In the comms sector, the number of subscribers with high-speed Internet access continues to grow. However, the ADSL/VDSL network market in South Korea is now saturated, and mobile operators should look into building additional networks to handle increasing traffic.

Fixed-line and mobile operators in South Korea are also looking into WiBro services to drive their business in the future. WiBro is expected to have a big impact on IT infrastructure sectors such as content, components and software. Lee also points out that WiBro together with DMB will offer rich opportunities for local chip developers in 2007.

Meanwhile, efforts by Samsung and MIC to promote WiBro have borne fruit as countries like the United States, Italy, Brazil, Venezuela and Croatia are working on commercializing the technology. This will open up more opportunities for companies in South Korea to tap into the market. Additionally, some companies, including Integrant Technologies, are now developing RF chips that will work with WiBro.

The country's rapidly growing RFID industry is also up for a promising year as the technology covers various sectors including industrial, medical, communications and aviation. The RFID middleware (REMS v2.0), co-developed by LG CNS and Korea Computer Service Co. Ltd, and managed by the Electronics and Telecommunications Research Institute (ETRI), has certification from EPCglobal RFID software standard. ETRI believes that the certification will give Korea a strong position in the global RFID market. According to ETRI's Jong-Seok Chae of the Telematics & USN Research Division, "this certification will be essential in strengthening the global competitiveness of RFID." Industry observers predict that 2010 will be the year of RFID.

- Park Dong-Wook
EE Times-Korea

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