10-13-98 Chip Sector Expects Revenues to Increase Next Year
Despite the questionable impacts the planned merger between the semiconductor units of the Hyundai and LG groups will have, domestic computer chip makers anticipate their revenues will go up next year, analysts said yesterday.
The LG Economic Research Institute said the industry will bounce back in the latter part of next year, when demand is expected to pick up as the industry starts to ride an upward curve analysts call a four-year cycle the semiconductor business.
The institute predicts the high-speed dynamic random access memory (DRAM) market, in which Korea's three chipmakers lead the industry, will incur a supply shortage over the next couple of years.
''Local chip manufacturers will have a good chance to make a leap forward next year,'' the institute said in a report.
Foreign analysts also echoed a recovery in the global chip market next year.
According to a study by Dataquest, a U.S. market research firm, the semiconductor industry will grow 11.8 percent next year, following a 6-percent decline by the end of this year.
Dataquest analysts estimate worldwide semiconductor revenue, excluding the volatile DRAM market, will reach $124 billion next year, an increase of 9.7 percent over 1998.
''Although the microprocessor market should rebound in some regions during the fourth quarter of 1998, the global impact of weak Asian economies means that key semiconductor markets are not expected to improve until mid-1999,'' said Joe Grenier, vice president and director of Dataquest's Semiconductor Device programs, in a statement.
With the expected global market recovery, domestic chipmakers are questioning the effects the planned merger of the LG and Hyundai groups chip making units will have on the nation's economy.
''If the big-deal debates would have happened a year later, the semiconductor industry would not have been included among the sectors for restructuring,'' an industry official said.
The Federation of Korean Industries (FKI), however, is determined to push the planned merger through. ''Both parties concerned agreed on the need to merge their chip units. There will be no change in the plan,'' an FKI official said. |
