South Korea’s semiconductor industry has recorded the largest gains in years in production and shipments, underscoring a revival of technology momentum that bodes well for the nation’s economic outlook next year and the global technology sector.
Chip production jumped 42 percent last month from a year earlier, the most since early 2017, while shipments soared 80 percent, the biggest annual gain since late 2002, data released yesterday by Statistics Korea showed.
Inventories expanded by 36 percent in the smallest rise since February.
Photographer: SeongJoon Cho/Bloomberg
The numbers suggest that South Korea’s most important industry is roaring back from a slump that weighed on the economy for more than a year and adds to optimistic signals for chipmakers such as Samsung Electronics Co and SK Hynix Inc.
The figures also suggest that a nascent recovery in global technology sector demand might be gaining momentum.
South Korea’s trade-reliant economy has muddled through this year with suppressed demand for semiconductors and is forecast by the central bank to have expanded 1.4 percent, less than 2.6 percent last year, under higher interest rates, an economic slowdown in China and geopolitical risks.
The latest chip data suggest the nation’s technology manufacturers might help support growth. The strength of semiconductor makers drove a better-than-expected 5.3 percent expansion in the nation’s industrial output from a year earlier last month, suggesting that the economy is gathering steam in the fourth quarter.
Demand for high-performance semiconductors has in particular helped the chip and machinery industries, the South Korean Ministry of Finance said in a statement.
The Bank of Korea sees the economy expanding by 2.2 percent next year on the back of exports gaining further strength after they returned to growth in October.
Memorychip prices are starting to bounce back while emerging technologies such as artificial intelligence add to demand.
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