In a significant move for the electronics industry, Samsung and SK Hynix have announced plans to ramp up their investments in semiconductor equipment in 2024. Samsung is set to increase its investment by 25%, reaching approximately 27 trillion won, while SK Hynix plans a dramatic 100% increase from this year’s investment, aiming for around 5.3 trillion won (1 trillion South Korean Won is $777,139,650)
This financial commitment is not just about increasing expenditure; it’s also about expanding production capabilities. Samsung Electronics is targeting a 24% increase in both DRAM and NAND production for 2024. This includes substantial investments in various DRAM wafer sizes, such as 250,000 of the 16-15nm level (D1z), 180,000 of the 14nm level (D1a), and 230,000 of the 13-12nm level (D1b). SK Hynix, on the other hand, is aiming to restore DRAM production to levels seen before last year’s production cuts. The focus for SK Hynix lies in enhancing the production scale of advanced DRAM types, including High Bandwidth Memory (HBM).
These investment plans are strategically aligned with the anticipated global market trends. Morgan Stanley forecasts a 3.9% increase in global smartphone shipments in 2024 compared to the current year. Moreover, the emergence of AI on devices is expected to create new demand in the market. AI applications necessitate large-capacity memory, thus driving the demand for these high-value semiconductor products.
Reported by Bloomberg, South Korea’s chip production increased by 42% year-on-year in November, the largest increase since the beginning of 2017, and shipments soared by 80%, the largest increase since the end of 2002.
The report pointed out that South Korea’s chip industry is recovering rapidly from the downturn, sending an optimistic signal to semiconductor companies such as Samsung Electronics and SK Hynix. The data also suggest that a tentative recovery in demand from the global technology industry may be gaining momentum.
South Korea’s Ministry of Finance said that market demand for high-performance semiconductors has driven the recovery of the chip and machinery industries. As demand for emerging technologies such as artificial intelligence increases, memory chip prices have begun to rebound.
Thousands of senior engineers and procurement professionals subscribe to our LinkedIn Market Intel newsletter – get yours here
For more help with looking at supply chain options, contact Astute Electronics