South Korea’s chip exports dwindle as dependence on China increases

South Korea is closely reliant on China for its semiconductor exports, and it ought to diversify its abroad markets to mitigate related dangers of decline in commerce with the neighboring nation, a report mentioned on Monday.

In keeping with statistics launched from the Korea Worldwide Commerce Affiliation, South Korea’s semiconductor exports to China from January to September was $42 billion, rising 1.7 share factors from the earlier 12 months turning into 40.6 p.c of the nation’s whole quantity of chips exports.

As Korea’s reliance on the Chinese language market elevated throughout that interval, its amassed chips export confirmed a decline of 16.3 p.c. This seems to have affected the nation’s whole chips export by lowering 19.1 p.c on-year, in accordance with the commerce affiliation.

South Korea’s semiconductor exports to america recorded $6.71 billion in the identical interval, declining by 0.6 share factors on-year to take 6.5 p.c of the full chip exports. Export to Japan additionally declined by 0.1 share factors on-year to document $1.06 billion through the interval, taking 1 p.c of the full export quantity.

The export ratio did improve with nations corresponding to Singapore (4.3 p.c), Taiwan (9.4 p.c) and the European Union (3 p.c), however the margins of improve all recorded within the vary of 1 share level.

Market observers say it is necessary for the nation to foster system semiconductors which are seeing improve in demand within the US and Europe.

“As our (South Korea’s) chip trade is basically centered on reminiscence semiconductors, its (gross sales) responds sensitively to the financial scenario of the importing nation,” Jang Sang-sik, a researcher at KITA mentioned.

“South Korea would have the ability to diversify its markets if it may well diversify its export merchandise, and foster the logic chips trade, which is excessive in demand within the US and Europe.”

By Jo He-rim (herim@heraldcorp.com)