Samsung Electronics Company and SK Hynix Inc are two of the top manufacturers of high-end chips. Combined, the two companies supply 74 percent of the global DRAM market and 47 percent of the global NAND flash sector.
Both companies and South Korea are set to directly benefit from the rising demand for computer chips. Plus, the rising demand will certainly push prices, creating further incentives to increase production. DRAM (dynamic random-access memory chip) chips are used by handset manufacturers, global data centers, and computers.
According to DRAMeXchange, the average price of a mainstay DRAM product 'DDR4 4Gb 512Mx8 2133MHz' jumped more than 12 percent from US $2.75 on March 31, 2017 to US $3.09 as of April 28, 2017.
NAND flash memory chips are also in high demand – they offer a nonvolatile computer storage medium which doesn’t require power to retain data. Thanks to these two advantages, these chips are also in demand.
South Korea is a major player in the high-end computer chip market, and any disruptions to the global supply will have direct ramifications. There are two regional issues that will impact South Korea:
1) South Korea just emerged from a major political upheaval. Following a special presidential election, the new President Moon Jae-in was sworn in on May 10, 2017. President Park Geun-hye was impeached after it was revealed that she had allowed several people to directly affect presidential decisions.
2) There are renewed tensions and skirmishes with North Korean leader, Kim Jong-Un, and any sudden decisions that Kim Jong-Un may have an impact on the global supply of IC chips.
In the first quarter of 2017, Samsung Electronics had a net profit of 7.68 trillion won, up 46 percent from 5.25 trillion won last year. SK Hynix’s net profit was up to 1.9 trillion from 448 billion won the year before.
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Check out our previous article for applications that use Intel's Xeon chip.
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