The Bank of Korea report highlights concerns over South Korea’s high reliance on chips for its exports.
If major US technology firms slow spending on artificial intelligence in the coming year then South Korean chip exports could decline by $50 billion to $100 billion according to a report by the central bank of the country.
In a written response to lawmaker Ahn Do-geol, the Bank of Korea (BOK) modelled a pessimistic scenario. According to the scenario, a sudden export shortfall will reduce South Korea’s GDP by 0.4 per cent next year. Moreover with a 10 per cent decline in Korean semiconductor unit prices, the current account surplus of the country would fall well below the central bank’s earlier projections of $430 billion for 2027.
Chips constitute a half of South Korea’s total export value. Combined capital expenditure by five US tech firms, Amazon, Google, Microsoft, Meta and Oracle has increased from $40 billion last year to an estimated $80 billion this year and is projected to reach $110 billion next year. However, according to BOK, significant uncertainty persists over AI demand and broader memory chip market.
