South Korea’s semiconductor exports fell in December last year, the first negative growth in 26 months. The decline is a clear sign that the “super boom” of the semiconductor industry has come to an end.
The nation’s semiconductor exports totaled US$126.71 billion (141.41 trillion won) last year, according to a tally released by the Ministry of Trade, Industry and Energy (MOTIE) on Jan. 1. This is a new milestone Korea has achieved.
However, semiconductor exports in December decreased by 8.3 percent on year by recording US$8.86 billion (9.89 trillion). It was the first time in 26 months after September 2016 that Korea’s semiconductor exports backpedalled.
“Korea’s exports dropped due to large IT companies’ adjustment of investment in data centers and an increase in global supply of memory chips,” the ministry said in its report.
The downturn in semiconductor exports puts Korea’s overall exports for 2019 on a red alert. World Semiconductor Trade Statistics (WSTS) has significantly lowered its semiconductor growth projections for 2019. It estimated global semiconductor sales in 2019 at US$490.1 billion (546.95 trillion won), up 2.6 percent from US$477.9 billion (533.34 trillion won) in 2018. The figure was downgraded from an earlier forecast of 5.2 percent increase.
In particular, the global memory semiconductor market, which is led by Samsung Electronics Co. and SK Hynix Inc., grew 61.5 percent in 2018, but the figure is expected to plunge to 33.2 percent this year and 0.3 percent next year.