No.162 / Mar 6, 2023
Challenges and Opportunities in the Semiconductor Market:
An Overview of the Current Landscape
Semiconductors are crucial components of modern technology, powering everything from smartphones to household appliances. However, the global semiconductor industry has faced significant challenges, such as a price decline and supply shortage owing to the COVID-19 pandemic, and trade tensions between major economies. Amidst this landscape, the rise of advanced language models like the Generative Pre-trained Transformer-based Chatbot (ChatGPT) has opened up new opportunities for innovation and collaboration, driving progress not only in the semiconductor industry but also beyond. From the current state of the semiconductor industry to the role of emerging technologies like ChatGPT in shaping its future, here is an overview of the current landscape.
Semiconductor crisis
The semiconductor industry had faced a crisis owing to various factors, including high demand, supply chain disruptions, and the COVID-19 pandemic. These issues had resulted in shortages of raw materials and components, making it difficult for manufacturers to keep up with the demand. As a result, semiconductor prices had increased, causing delays in production, and impacting many different industries. In addition to this crisis, the semiconductor industry is now experiencing a decline in prices due to a decrease in trade volume and global economic recession. For example, semiconductor exports have decreased by 40.7% compared with the same period last year. This decline has caused a negative impact on the performance of semiconductor companies like Samsung Electronics and SK Hynix, with both reporting lower sales and operating profits. The decline in prices is a major challenge for the industry and requires innovative solutions to sustain profitability and growth.
The rise of ChatGPT
The release of the Artificial Intelligence (AI) chatbot ChatGPT by Open AI, a startup that has a close relationship with Microsoft, has intensified the global AI war, leading to the reorganization of the global industrial topography around AI. The demand for Graphics Processing Units (GPU) in AI has offered an unexpected opportunity for the memory semiconductor industry, particularly high-performance Dynamic Random-Access Memories (DRAM) such as High-Bandwidth Memory (HBM). This new demand presents a potential for an early rebound in the semiconductor industry, which has been struggling to break through the frozen market. Park Jung-ho, vice chairman of SK Hynix, said that AI chatbot services will be a new “killer application” of semiconductor demand and that memory semiconductors will always be at the center of technological innovation that will occur in the AI era. The semiconductor industry is expected to diversify its sales sources, particularly in the AI market, which is expected to grow to 86.1 billion dollars in 2026. The market growth for AI semiconductors offers an opportunity for major domestic semiconductor companies to preoccupy the AI market.
While the challenges posed by the semiconductor crisis and declining prices are significant, the release of ChatGPT represents an exciting opportunity for the technology industry to innovate and find new ways to meet the evolving needs of consumers and businesses. With the semiconductor companies’ continued efforts and commitment to excellence, the technology industry will emerge stronger and more resilient.
By Kim Ji-yeon, AG Reporter
jykim0502@ajou.ac.kr
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