The recovery in semiconductor demand led by AI is becoming visible. With the outlook for 2024 projected to show a recovery and turnaround in business conditions, the speed of operating rate adjustment is expected to be the biggest issue next year.

The 2023 System Semiconductor Forum and the 24th Korea Semiconductor Design Fair were held on the 7th at the Sono Felice Convention in Samseong-dong, Seoul, hosted by the Korea Semiconductor Industry Association.

This forum, which aims to share the technology trends of major companies in the system semiconductor field and provide information on promising technologies in future new industries, started with the Semiconductor Design Competition Awards Ceremony, and presented sessions such as △24 World Economic Outlook △Ultra-large AI Trust and AI Semiconductors △Development Status and Outlook of Autonomous Vehicles △Establishment of AI Cloud Center and Selection of AI Accelerator △Foundry Technology Trends and Ecosystem Reinforcement Plan △24 System Semiconductor R&D Planning Direction.

On this day, Samsung Securities Senior Researcher Jong-wook Lee presented his outlook for the semiconductor market. As the current semiconductor market is expected to recover, momentum led by artificial intelligence (AI) is expected to strongly lead 2024.


Researcher Lee Jong-wook said, “Verification of AI services, including generative AI, is extremely important for future semiconductors,” and predicted that the success of AI services will soon lead to strong demand for expansion of AI servers and general servers by hyper-tech companies.

While investment in general servers has been slow this year, demand for servers is expected to increase by 10% next year. The popularity of AI is expected to competitively strengthen investment in servers and AI servers.

In addition, the poor demand in the legacy areas of PCs and mobile devices was one of the risks that made it difficult to be optimistic about the semiconductor industry. These mobile and PC markets account for 50% and 15% of the memory area, respectively, while the AI semiconductor market currently accounts for only 4-5% of the memory area and 5-6% of system semiconductors.

Accordingly, recovery in the mobile market is necessary, and the industry expects that the success or failure of advanced AI services in the future, as well as the emergence of AI PCs and the increase in AI-equipped devices, will create new demand and early replacement demand, which will have a synergy effect on the expansion of the semiconductor market.

In a move expected to boost mobile demand, orders for semiconductor components for premium smartphones as well as low- to mid-priced smartphones are increasing in the Chinese market, centered around Huawei. As Huawei expands its supply of components, Oppo, Vivo, and others are also said to be competitively securing components, and Apple is also said to not be reducing its orders for iPhone components.

The researcher said, “Smartphone components will be booming until the Lunar New Year holidays next year, and although smartphone product sales may not increase continuously, semiconductor demand is good until the first quarter of 2024.” However, he added that the trend outlook after the first quarter is unclear.

The biggest issue in 2024 will be the recovery of semiconductor operating rates. Currently, foundry and memory operating rates have fallen significantly due to the sluggish demand, so controlling the speed of the recovery of operating rates is expected to be important. The researcher said, “While it is difficult to decide on the expansion of Kepa, the operating rate is easy to decide, so supply and demand will be a variable,” and predicted, “Controlling suppliers’ greed will be a big issue in supply and demand next year.”

Kim Jeong-hoe, vice chairman of the Korea Semiconductor Industry Association, said, “When the memory industry was struggling last year, system semiconductors were relatively less affected, and it was an opportunity to realize that it is good to have a balanced approach between the memory and system semiconductor industries.” He added, “The most important thing for system semiconductors is to foster high-level human resources and design personnel.”

Lee Yong-pil, director general of the Ministry of Trade, Industry and Energy, emphasized, “The semiconductor industry is the core of our economy, accounting for 19% of exports and 8% of total manufacturing production,” and stated, “We must overcome our weakness in the system semiconductor sector, including fabless, design houses, and foundries, and secure global competitiveness.”

Accordingly, he stated, “The current government is working to achieve a semiconductor superpower led by businesses and talent, and will continue to work on establishing a semiconductor academy, promoting national R&D, and designating and fostering specialized complexes to create an ecosystem.”