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.

"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.