Renewable Energy Exports and Korea's ICT Sector

What does renewable energy have to do with Korea's Information Society?  The answer is partly provided by an interesting article in the Joongang Daily this morning, entitled "Renewable Energy Sector Booms, but also Lags."  According to the Knowledge Economy Ministry and Solar & Energy, total sales in the local renewable energy market reached $7.2 billion last year, a 58 percent surge from the previous year.  Exports jumped 77 percent to $4.5 billion, mainly boosted by demand for locally made solar power generators and related equipment.  The number of firms and employees in the renewable energy sector increased accordingly.   A Ministry official, noting that the renewable energy sector consists mainly of three sectors --solar, wind and biofuel--suggested that “What Korea should focus on is to integrate existing technology from sectors such as semiconductors and liquid-crystal displays with solar power energy, and also shipbuilding with wind power."

Korea's First Half IT Exports Set a New Record

The Joongang Ilbo reports today that Korea's IT exports are at record-setting levels.  The graphic accompanying this post shows the recent pattern (click to see a full-size version).  Not surprisingly, semiconductors and flat panel displays are leading the export surge.   Exports of mobile handsets, a traditional Korean export strength during the feature-phone era, dropped 20.8 percent during the first six months of this year, due to a decline in export unit prices and a delay in smartphone production by Korean firms.

The regional pattern is also interesting.  Korea exported the most IT products to China, selling $33.1 billion worth of items in the country, followed by the European Union with $8.99 billion, and the United States at $8.49 billion.

MIT Researchers Create Molecular Chips

The news reported in The New York Times today that MIT researchers have created molecular chips should resound through Korea's semiconductor industry.  This development suggests that the growing power and decreasing size of semiconductors may continue to fuel the information revolution for some time to come.  The graphic accompanying the story (click on the graphic here to see a larger version) is an actual photograph of the molecular chip developed at MIT.  The researchers used a new technology called "copolymers" to allow chip manufacturers to take molecules and arrange them in complex patterns on silicon chips.

Chipmakers to Battle in the Smartphone Market

The next big battle in the semiconductor industry, as described by an article in The New York Times today, is over chips for the coming generations of hand-held mobile devices.  As the article aptly begins, "The semiconductor industry has long been a game for titans."  The going rate for a state-of-the art chip fabrication factory is about $3 billion.  The plants typically take years to build and the microscopic size of chip circuitry makes for challenging engineering in order to keep up with Moore's Law.

The next phase of chip wars will focus on smartphones along with tablet and notebook sized devices.  Intel, which until now has had a very small presence in the smartphone market, is joining the fray.   The current market leader is ARM Holdings.  Global Foundries, a spinoff of Advanced Micro Devices, this year plans to start making chips at one of the most advanced factories ever built in Dresden, Germany.  Global Foundries has been helped by close to $10 billion in current and promised investments from the government of Abu Dhabi.

Other competitors in this industry include Taiwan Semiconductor Manufacturing, United Microelectronics and, of course, Samsung Electronics.

Rising DRAM Prices--More Good News for Korea's ICT Sector

I've been reading with great interest about how Korean mobile phone handsets and LED backlit television sets are doing so well in the U.S. and other international markets. Today, the Joongang Ilbo reports that the good news has spread to dynamic random access memory chips (semiconductors) which are a big item for Samsung Electronics and Hynix. These memory chips are important components of many modern digital devices. Saying abreast of technology change in the DRAM industry requires huge capital investment. Nevertheless, these chips are an important commodity in the information age, and Korea seems positioned to maintain its world leading position as a manufacturer and exporter of DRAM chips. NAND flash memory is another interesting category, and the semiconductor industry in Korea is steadily making efforts to branch out into other types of chips.

I'll be on vacation for the next week, so will probably not post any additions to the blog until September.

Intel to Invest in Three U.S. Fabs in the Next Two Years

The announcement that Intel will invest $7 billion to expand and transform three U.S. manufacturing plants should be good news for Korean electronics companies.  Business Week reports  that, as early as this fall, the company plans to start shipping the world's first microprocessors created at the atomic 32 nanometer level--transistors so small that 4 million of them could fit in the period at the end of this sentence.  Intel CEO Paul Otellini said in a speech that "the chips produced by the new fabs will become the basic building blocks of the digital world, generating economic returns far beyond our industry."  By shifting to a more advanced manufacturing process, Intel hopes to make inroads into selling chips not only for PCs, but for consumer electronics, cell phones and other internet-connected devices.  Such chips could substantially lower development costs for Samsung, LG and their international competitors.

Korean Chipmakers Widen Technology Gap in Memory Chips

Just after my previous post about Samsung Electronics development of 40 nanometer technology for manufacturing memory chips, Hynix announced on Sunday that it has developed the world's first one gigabit DRAM chip using 44 nanometer technology!  These announcements make it clear that Korea's main semiconductor manufacturers have opened up a technology lead over their major rivals in other countries.  Reports in the Korea Times and other local press noted that prices of DRAM chips are gaining momentum after the German-based firm Qimonda filed for insolvency.  The productivity of this latest DDR3 (double data rate) chip will be 50 percent greater than chips now on the market.   Production costs and power consumption by the chips will also be lowered.  A significant aspect of this development is that it is based on technology advances within Hynix.

Another World's First in Memory Chips for Samsung Electronics

As reported in the JoongAng Daily, Samsung Electronics has developed DDR2 dynamic random access memory using 40-nanometer technology, becoming the first among the world's leading chipmakers to do so.  This new technology allows Samsung to enhance production by 40 percent over the current 50 nanometer technology that it and Hynix are using.  The 40 nanometer DRAM chip also consumes up to 30 percent less electricity than chips produced with the older technology.

For chip makers, developing higher DRAM density means they can cut production costs and lead market trends by providing the latest DRAM chips at higher prices. Since chips are produced from a wafer, the smaller chips are, the more chips are produced out of one wafer.

This new development gives Samsung a head start on its rivals and industry observers said it will take two years for them to catch up.

New York Times: "Big Step Forward for Flexible Electronics"

The discovery made news rather quickly and now the New York Times has picked up the story.  A research team from Sungyunkwan University and the Samsung Advanced Institute of Technology has developed a technique for making stretchable, thin electrodes out of graphene.  As the New York Times article put it "Graphene is a single-layer sheet of carbon atoms (the building block, in fact, of the graphite used in pencils) and has properties that make electronics engineers swoon. But making graphene sheets of a practical size has proved problematic." In addition to being nearly transparent and having excellent electrical characteristics, the films this research team has developed are unaffected by bending or stretching. And the researchers say the process is scalable, so relatively large films can be made.  More on this development in later posts.

"Job Creation 7 Times Slower Than Economic Growth"

An article in today's Korea Times quickly caught my eye with the headline "Job Creation 7 Times Slower than Economic Growth." Fundamentally, this is all due to the advances in communication technology that started in the 1980s and are now bearing fruit. The newspaper article quotes an official from the Ministry of Strategy and Finance as saying ``Korea's industrial structure has transformed into a technology-and capital-dependent one from a labor-intensive one. Manual jobs have largely been moved to China and other Asian economies in which labor costs are much cheaper than here. The economy is expanding without creating as many jobs as it used to." This Ministry official's reference to technology really refers to information and communication technologies (ICT), more than any others. Even more specifically, I would note that there are four key anchor technologies in the fields of industrial and consumer electronics that underpin South Korea's economy today. They are:

• Semiconductors


• Flat screen displays including color television displays.


• Mobile handsets and other devices.


• Electronic switching systems which are key components of digital networks.

As shown in the accompanying graphic, employment elasticity ― the job growth rate divided by output growth rate ― fell to an all-time low of 0.15 in the second quarter of the year, down from 0.25 in the same period last year.