Korea Enjoys US$3.1 Billion ICT Trade Surplus in July

Korea’s trade balance in the information and communications technology (ICT) industry provisionally reached a surplus of US$3.19 billion in July after a slowdown in a drop in exports from April to June.

The Ministry of Trade, Industry and Energy (MOTIE) said on Aug. 16 that ICT exports reached US$14.61 billion in July while ICT imports US$11.42 billion.

ICT exports fell by 24.3 percent from the same period last year due to the continuation of low unit prices of semiconductors, Korea’s main export item, and a delayed recovery in demand for ICT devices. However, a decline in exports has been easing since April, with the rate of decline in the 20 percent range for three consecutive months since May.

By item, the year-on-year decline was 33.7 percent for semiconductors, 5.4 percent for displays, 19.6 percent for mobile phones, 28.0 percent for computers and peripherals, and 21.1 percent for telecommunications equipment.

By region, exports rose 23.2 percent to Japan thanks to an increase in exports of semiconductors and secondary batteries to the country but declined in most major countries, including China (a drop of 27.7 percent), Vietnam (a drop of 18.6 percent), the United States (a drop of 28.3 percent), and the European Union (a drop of 24.9 percent).

Semiconductor exports totaled US$7.54 billion, down 33.7 percent year on year. Their unit prices continued to slide due to a slowdown in the semiconductor industry, falling by 25.9 percent in system semiconductor exports and 41.7 percent in memory exports.

In particular, the decline was driven by weak unit prices of memory, and the base effect of US$11.38 billion in July 2022, which went down in history as the highest-ever July export figure.

Displays decreased 5.4 percent to US$1.89 billion. Liquid crystal displays (LCDs) declined 15.2 percent to US$400 million, continuing to be impacted by domestic production disruptions.

Organic light-emitting diode (OLED) display exports shrank by 0.2 percent to US$1.25 billion, reflecting a modest decline due to a delayed recovery in demand from upstream industries. However, display exports to Vietnam, a major cell phone production base, rebounded, decelerating the overall decline.

By region, exports to China dipped by 27.7 percent to US$6.04 billion. Exports of computers and peripheral equipment slid 31 percent due to growing demand for solid state drives (SSDs). But semiconductor exports descended by 33.1 percent and display exports fell by 27.3 percent.

Exports to Vietnam fell 18.6 percent to US$2.52 billion. Display exports inflated by 4.9 percent but semiconductor exports dropped by 43.1 percent due to increased demand for components for production of smartphones scheduled for release in the second half of the year.

Exports to the United States contracted 28.3 percent to US$1.73 billion. Mobile phone exports surged 72.5 percent, driven in part by demand for premium models, but semiconductor exports fell 41.8 percent and computer and peripheral exports declined 69.9 percent.

Mobile phone imports rose 28.2 percent to hit US$770 million but semiconductor imports dwindled 22.8 percent. A drop in imports reached 20.2 percent for computers and peripherals and 5.2 percent for displays.

By region, imports from Vietnam went up by 15.5 percent, but Korea posted drops in imports from China (a drop of 25.3 percent), Taiwan (20.3 percent), Japan (23.2 percent), and the United States (15.3 percent).