Disaster to Global ICT Industry
Amid growing tensions on the Korean peninsula, US President Donald Trump called on South Korea to abolish or renegotiate the Korea-US free trade agreement (FTA). Under these circumstances, US economic news TV channel CNBC reported on September 6 that analysts were studying "how important South Korea is to global technology".
According to market researcher IDC, South Korea accounts for 17% of the global semiconductor market and 64% of the global memory semiconductor market. "If South Korea is attacked with a missile, global semiconductor supply will stop immediately and production of all electronic equipment will discontinue," said Kim Soo-kyum, vice president of Korea IDC.
An attack on South Korea may bring a chaos to the world IT supply chain. Capital Economics says that South Korea is the largest producer of LCDs in the world. It is also the world's fourth-largest producer of electronic devices in terms of added value.
“If South Korean production was badly damaged by a war, there would be shortages across the world,” said economists Gareth Leather and Krystal Tan at Capital Economics. “The disruption would last for some time -- it takes around two years to build a semiconductor factory from scratch.”
"When taking into account South Korea's role as a producer of intermediate goods in the electronics sector, its production capacity lost by war will not be made by any country in the world. Many companies outside South Korea will also be forced to stop production," they added.