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Memory, Displays at Risk if North Korea Goes South

All quiet on the Eastern Front… too quiet, actually.

A month ago, we started the conversation about what might happen to the electronics supply chain if North Korea went sideways on the world. At the time, the north was saber rattling in the worst way. (See: Time to Think About Korean Contingencies and Infographic: North Korea’s Road to War.)

Since then, the rhetoric has dialed back a bit, but the tensions remain. IHS iSuppli helps put things into perspective. Here's one data point:

  • In 2012, 66 percent of industry revenue for the dynamic random access memory (DRAM) market, as well as 48 percent of total NAND flash revenue, belonged to the two South Korean memory titans Samsung and SK Hynix.

IHS iSuppli senior principal analyst for DRAM & memory Mike Howard points out that a disruption hitting those two vendors would likely force flash-memory downgrades in mobile designs, but the impact from DRAM losses would be even tougher to resolve quickly.

“A server with only half its intended DRAM is essentially half a server — and a smartphone cannot have its DRAM quantity changed, as it needs the original amount for which it was designed,” Howard noted.

We Laugh Now…

...But if North Korean dictator Kim Jong Un ignites a war with South Korea,  the memory and display supply chains will be severely disrupted.

…But if North Korean dictator Kim Jong Un ignites a war with South Korea,
the memory and display supply chains will be severely disrupted.

Risk on display
It's not just DRAMs and flash memory that are at risk, according to Howard. LG and Samsung own half the world's market share in large LCD panels. More troublesome for the mobile industry, nearly three in four tablet displays rolls off South Korean lines.

Howard notes inventory and production capacity are high, which means a near-term disruption will have minimal impact on the display supply chain, but “a long-term stoppage or reduction of production would have a major effect and dramatically reduce global tablet supply.”

Once more into the fray
In DRAM, iSuppli points out that Korea holds, worldwide, eight percentage points more market share today than it did in 2010. NAND flash has remained steady, in terms of global market share (about 50 percent).

So, here we go again. Another day, another issue reveals a major stress crack in the global electronics supply chain superstructure.

When are we going to learn?

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11 comments on “Memory, Displays at Risk if North Korea Goes South

  1. elctrnx_lyf
    May 7, 2013

    Southkorea is a very significant country with the major companies LG and Samsung producing both the semiconductor and entire consumer electronic products. So any war from Northkorea will completely disrupt the market of these two giant organizations.

  2. SunitaT
    May 7, 2013

    @Brian, thanks for the post. I think this is just posturing from NK.  Infact North Korea has withdrawn two mobile ballistic missiles from a launch site in the eastern part of the country which clearly shows that NK was just giving empty threats.

  3. SP
    May 7, 2013

    yes they keep giving threats. If North Korea leader does anything childish, it will be making the whole world its enemy. Destroying is so easy , building something is difficult. Hope he keeps personal enemities separate but to dictators one can hardly say anything. Its better to prepare the defence.

  4. prabhakar_deosthali
    May 7, 2013

    In my opinion US will put all its political pressure to preempt any possibility of the actual war , though the tensions could prevail for quite a long time.

  5. t.alex
    May 7, 2013

    Let's hope there is no war.. If I am not wrong Kim Jong Un was educated in western countries but he seems to be as bad as his dad.

  6. Brian Fuller
    May 7, 2013

    @tirlapur, I think you're quite correct. Tensions seem to be easing a bit as the North has pulled some missile batteries back in the last day or so according to CNN.

    That said, you just never know what's going on up there. The New York Times reported today that Western intelligence in North Korea is very poor. 

    Not a good sign. 

  7. Ravenwood
    May 7, 2013

    Pondering the consequence of war in terms of supply chain inconvenience, and corporations-as-collateral damage, seems pretty shallow. Two things are certainin in this scenario: Supply Chain life would go-on; Korean human lives — on a huge scale — would not.

  8. SunitaT
    May 8, 2013

    If I am not wrong Kim Jong Un was educated in western countries but he seems to be as bad as his dad.

    @t.alex, you are absolutely right. He went to school in Switzerland near Bern. Its really surprising that inspite of knowing what the other countries feel about North Korea, still Kim Jong behaves like this.

  9. SunitaT
    May 8, 2013

    In my opinion US will put all its political pressure to preempt any possibility of the actual war , though the tensions could prevail for quite a long time.

    @prabhakar_deosthali, I am not sure if US can exert any pressure on NK. I think the only country which can exert pressure on NK is China. Hence I feel US will take help of China to ease this tension.

  10. t.alex
    May 8, 2013

    tirlapur, perhaps he takes it the negative way when people talk bad about North Korea. Instead of improving the country, he turns around and does bad things to others.

  11. Hailey Lynne McKeefry
    May 31, 2013

    As the old saying, if you fail to plan, you plan to fail. So is there anything manufacturers can do try to head off this disaster? Is there enough product in the pipe to weather a disruption of any duration?  Clearly the theat is real… so it's time to get thinking…

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