Japan and South Korea outbreak accelerates component price fluctuations

South Korea and Japan, as major manufacturing countries after China, the United States, Japan, and Germany, their epidemic development trends directly affect the stability of the global manufacturing supply chain.

Taking storage as an example, the cost of storing in a mobile phone usually reaches 25% to 35%, which has exceeded the screen and CPU, becoming the largest cost of a mobile phone. Samsung and SK Hynix both occupy important positions in the memory field.

According to the DRAMeXchange survey, the global NAND brand manufacturers' revenue rankings in the fourth quarter of 2019:

Samsung ranked first with a market share of 35.5%;

SK Hynix ranked sixth with a market share of 9.6%;

Ranking of global DRAM manufacturers' own brand memory revenue in the fourth quarter of 2019:

Samsung ranked first with a market share of 43.5%;

SK Hynix ranked second with a market share of 29.2%;

In other words, the market share of two Korean manufacturers in the NAND field has reached 45.1%, while in the DRAM field, the market share is as high as 72.7%.

Shengang Securities pointed out in the report that the storage market has experienced a power outage in the Western Digital in July last year and a power outage at the Samsung Huacheng plant earlier this year, and prices have stabilized. Affected by the epidemic this time, especially South Korea as a global storage hub, the epidemic situation is not optimistic, which may affect the normal operation of Samsung and SK Hynix factories, which will affect global storage supply and lead to price increases.

The latest quotations in the industry show that spot prices of memory and SSD hard disks have begun to fluctuate. Taking the spot price of 8Gb DDR4 standard DRAM as an example, it has increased more than 10% since January, and the spot price of 4Gb DDR4 standard DRAM has increased by nearly 20%.

Japanese companies occupy an important position in the field of semiconductor materials. In the first 5 months of 2019, semiconductor materials produced in Japan accounted for 52% of global production. During the same period, the value of photoresists imported from Japan in Korea reached US $ 110 million.

The Korea Trade Association report shows that South Korea ’s semiconductor and display industries rely on Japan for 91.9%, 43.9%, and 93.7% of fluoropolyimide, photoresist, and high-purity hydrogen fluoride. In the field of silicon wafers, Japan's Shin-Etsu Chemical and SUMCO have 53% of the global market share. In the Japan-South Korea trade war last year, Japan restricted the export of three materials, including fluoropolyimide, photoresist, and high-purity hydrogen fluoride, to South Korea, which caused a shock in the entire semiconductor field.