Semiconductor market to remain tough in Q4

Semiconductor export is expected to recover in the fourth quarter, according to report published by the Korea International Trade Association (KITA).

But it won’t be all roses due to the economic state of export destination countries, US sanctions against Huawei and price drops of server memory chips.

Semiconductor Export Business Survey Index (EBSI) point is expected to 122.4 in the fourth quarter, an increase from 116.1 of the third quarter. The point is second to the petrochemical industry’s 136.2. 

However, trade dispute scored 91.2 and export destination countries 91.9. China’s recovery from the COVID-19 pandemic has increased the export destination countries score somewhat but materials price has also increased with that that has increased concerns.

Data center and server growth in the first half of 2020 helped the semiconductor industry but it is likely that it will be different for the remainder of the year. Server DRAM prices are expected to fall by 13% to 18% in the fourth quarter compared to the third quarter, according to market research firm TrendForce.

The sanction against Huawei that went into effect on September 15 will also pull memory prices down.

KITA surveyed 2,000 of its members with over US$500,000 in export in 2019. A EBSI score higher than 110 means the companies are optimistic about growth.