South Korea’s semiconductor production last month fell by the highest rate since the global financial crisis, weighing on the nation’s industrial output and pointing to a further cooling of overseas demand for tech components as the world economy slows.
Chip production shrank for a fourth straight month, falling 15 percent from a year earlier in the largest drop since 2009, data released yesterday by Statistics Korea showed.
Overall industrial production contracted 3.7 percent from a year earlier for the biggest fall since the start of the COVID-19 pandemic, the data showed.
Photo: Reuters
The drop in activity speaks to weakening recovery momentum in a nation closely tied to the world economy. South Korea’s growth is already under pressure from falling exports and rising interest rates at home, with the gloomy outlook overseas adding to concerns.
The probability of recessions in major overseas economies such as the US is rising as the US Federal Reserve leads a wave of monetary tightening to combat inflation, and as Russia’s invasion of Ukraine continues.
Although China’s about-turn on its “zero COVID-19” policy suggests its economy might regain strength, a surge in infections would complicate the picture.
The weakening chip demand adds to an array of factors making South Korea’s economic outlook more uncertain, including the implications of a truckers’ strike that recently ended and a crowd-crush tragedy in Seoul, the South Korean Ministry of Economy and Finance said in a separate statement.
The cloudy outlook gives the Bank of Korea more reasons to be cautious as it mulls the end of its tightening cycle. The central bank has been hiking rates for more than a year, and is debating whether to carry out one or two more next year.
The latest output figures showed chip production was down 11 percent on a month-on-month basis, while semiconductor inventories climbed 20 percent from a year earlier last month, picking up from 12.9 percent the previous month, Statistics Korea said.
The double-digit increases in inventories since October underscores a global oversupply of memory chips, a sector in which South Korea leads production. Chipmakers are recalibrating their investment plans as they brace for a drop in demand for their products at home and abroad.
Zhang Yazhou was sitting in the passenger seat of her Tesla Model 3 when she said she heard her father’s panicked voice: The brakes do not work. Approaching a red light, her father swerved around two cars before plowing into a sport utility vehicle and a sedan, and crashing into a large concrete barrier. Stunned, Zhang gazed at the deflating airbag in front of her. She could never have imagined what was to come: Tesla Inc sued her for defamation for complaining publicly about the vehicles brakes — and won. A Chinese court ordered Zhang to pay more than US$23,000 in
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said that its investment plan in Arizona is going according to schedule, following a local media report claiming that the company is planning to break ground on its third wafer fab in the US in June. In a statement, TSMC said it does not comment on market speculation, but that its investments in Arizona are proceeding well. TSMC is investing more than US$65 billion in Arizona to build three advanced wafer fabs. The first one has started production using the 4-nanometer (nm) process, while the second one would start mass production using the
‘NO DISRUPTION’: A US trade association said that it was ready to work with the US administration to streamline the program’s requirements and achieve shared goals The White House is seeking to renegotiate US CHIPS and Science Act awards and has signaled delays to some upcoming semiconductor disbursements, two sources familiar with the matter told reporters. The people, along with a third source, said that the new US administration is reviewing the projects awarded under the 2022 law, meant to boost US domestic semiconductor output with US$39 billion in subsidies. Washington plans to renegotiate some of the deals after assessing and changing current requirements, the sources said. The extent of the possible changes and how they would affect agreements already finalized was not immediately clear. It was not known
A TAIWAN DEAL: TSMC is in early talks to fully operate Intel’s US semiconductor factories in a deal first raised by Trump officials, but Intel’s interest is uncertain Broadcom Inc has had informal talks with its advisers about making a bid for Intel Corp’s chip-design and marketing business, the Wall Street Journal reported, citing people familiar with the matter. Nothing has been submitted to Intel and Broadcom could decide not to pursue a deal, according to the Journal. Bloomberg News earlier reported that Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is in early talks for a controlling stake in Intel’s factories at the request of officials at US President Donald Trump’s administration, as the president looks to boost US manufacturing and maintain the country’s leadership in critical technologies. Trump officials raised the
RSS