News description
       SEMCO is liquidating its HDI production line in Kunshan, Suzhou, in a move to reduce its level of dependence on Chinese production and moving its production lines to other Southeast Asian countries.

Impact analysis
       If we look at the current market share of global smartphone shipments, although Samsung still ranks first in the world with a market share of 21.3% in 2019 Q3, Huawei is only 3.1% behind them in second place with 18.2%. Compared to 2018 Q3, when it was ahead of Huawei by 5.7%, Samsung’s current market share has shrunk considerably. Samsung’s Q3 mobile phone shipments grew by 8.3% due to the launch of the Galaxy Note 10 series in August and the ongoing sales of its existing Galaxy A series. If not for these, its market share would have declined even further. As the HDI products produced by SEMCO are primarily supplied to Samsung mobile phone applications, when its mobile phone sales strategy is based on low-end tactics, its suppliers, including the upstream PCB manufacturers, must follow Samsung’s layout pace.
       Unimicron accounts for the highest global market share of HDI, an output of 11%, and SEMCO’s shipment area accounts for only 5% of the world’s total, and so is not regarded as a global leader in HDI production. Therefore, even if SEMCO withdraws from HDI production, orders will be mainly transferred to Korean manufacturers, and the impact on the global HDI production layout will be quite limited. Besides, SEMCO is currently moving its production line from Kunshan, China to Vietnam, so the impact on the supply and demand of HDI will be negligible. SEMCO’s transfer of HDI production to Vietnam has highlighted the trend of the China-US trade war, where countries are reducing their manufacturing capacity in China.
        IITP, the government agency responsible for Korea’s ICT industry policy and management, announced its top ten priorities and forecast for the ICT industry in 2020. One of them is the “New Southbound and Northbound Policy: Fully Escape China’s Trade Dependence,” indicating the gradual rise of emerging markets (such as the ASEAN market) outside of China. Under the dual advantages of market and cost attraction, and to avoid the impact of the China-US trade war, it is not difficult to understand Samsung’s focus on mobile phone production in Vietnam, which would also move the production of Korean PCBs and other components to new bases outside of China. Currently, it seems that Vietnam is the first choice for the overseas production of the South Korean electronics industry.