S. Korea's chip exports to surpass $100b this year

A clean room of a chip fabrication line of Samsung Electronics in Hwaseong, Gyeonggi Province. (Samsung Electronics)

South Korea’s chip exports are expected to grow 10.2 percent and surpass $100 billion this year, which would be the nation’s second-best performance since 2018, according to the Trade Ministry on Tuesday.

Korea will again become the world’s second-largest semiconductor provider this year, following the US, according to the Ministry of Trade, Industry and Energy’s first-ever market report focusing solely on semiconductors.

The report said Korea’s shipments of chips last year bounced back to $99.2 billion from $93.9 billion in 2019, largely backed by increasing global demand for 5G network facilities, personal computers and mobile devices, the ministry explained.

During the last four months, monthly gains in chip exports were in the double digits. In December, on-year growth stood at 30 percent.

“Exports of semiconductors propped up the nation’s economy amid the fallout from the COVID-19 pandemic and sanctions on Huawei,” said Industry Minister Sung Yun-mo.

The upward trend is to continue this year in line with the global semiconductor industry’s growth, the ministry’s report added.

The average growth rate of the global semiconductor market announced by three international market researchers -- Omdia, World Semiconductor Trade Statistics and Gartner -- reached 8.7 percent, the ministry said.

Local research institutions also offered improved outlooks for the nation’s chip exports.

The Korea International Trade Association predicted that the nation’s chip exports would increase by 5.1 percent this year. The Korea Development Bank and the Korea Institute for Industrial Economics and Trade said they would increase by 9.4 percent and 13.1 percent, respectively.

Korea’s exports of DRAM chips will remain strong. Exports of memory chips this year will reach $70 billion, growing 12 percent on-year, the ministry said.

Exports of non-memory chips are expected to improve 7 percent on-year to surpass $31 billion in 2021.

Korea’s investment in semiconductor equipment and facilities will increase 4 percent to mark $72 billion, allowing the country to reclaim the No. 1 spot taken by China and Taiwan in recent years, the ministry added.

Meanwhile, industry sources said the profitability of the nation’s semiconductor exports could fall if the Korean won continues to fall against the greenback.　

By Shim Woo-hyun (ws@heraldcorp.com)

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