What Display Daily thinks: It’s not turning out to be a lazy summer for anyone. While there is bound to be a lot of posturing around China’s export controls on gallium and germanium, there’s a lot to concerned about when it comes to Korea’s export figures.
One story in the Korean press recently talked about Samsung’s earnings call and its emphasis on its legal battles with BOE. Samsung has to look to Japan and Taiwan for LCD supplies, and there just may not be enough supply to meet the demands of the company. On other hand, the price incentives on Samsung’s QD-OLED TVs don’t really inspire confidence in a robust consumer market for premium products.
It all makes for a tough third quarter.
South Korea’s Display Exports Fall
The South Korean Ministry of Trade, Industry, and Energy’s latest data on July 2023 says that display exports declined 4.6% amid shrinking domestic LCD production and the delay in mobile OLED demand recovery. Exports of OLED displays decreased by 0.4% year-on-year to $1.265 billion due to delayed demand recovery.
Overall, the data shows a 33.6% decrease in semiconductor exports and a 33.4% decrease in computer exports. In the semiconductor sector, there was a slight increase in orders following inventory adjustments in downstream industries like PC and mobile. However, this was followed by a sharp drop in exports due to falling memory prices and a decrease in foundry utilization. Wireless communication exports experienced a significant decline of 15.3%, and display exports decreased by 4.6%.
The most significant slump was observed in memory semiconductors, with exports reaching only $3.6 billion, indicating a staggering decrease of 41.7% compared to the same period the previous year.
The ministry is also having to respond to China’s export controls on gallium and germanium, which are crucial materials used in semiconductors and OLEDs. On August 1, 2023, the ministry conducted a supply chain inspection meeting attended by industry associations and officials from related organizations to address concerns about potential disruptions in the supply chain. Korean companies expressed worries about price hikes and customs clearance difficulties, prompting them to seek alternative import sources.
Gallium has limited domestic stockpiles in South Korea but can be substituted with imports from the United States and Canada, while germanium, used in semiconductor processing, relies on diversifying import sources as there is no government stockpile. Both minerals are produced in Korea as by-products from steel and aluminum processing.
The South Korean government and its local industry partners and trade associations plan to monitor the supply and demand trends of gallium and germanium continuously and find quick solutions to any difficulties that may arise. They will operate a consultative body involving the Sobujang Supply Chain Center, Rare Metal Center, and Minehae Mining Corporation to stabilize the supply chain of major import-dependent items, share information about global supply and demand trends, investigate and procure stockpiling demand, and explore alternative technologies.
