Korean exports may record a contraction this year when excluding semiconductors
SEOUL, December 7 (WAM) – South Korean data showed that the country’s exports excluding semiconductors may record negative growth this year, even though annual exports are about to exceed $700 billion for the first time ever.
Semiconductors, which entered a supercycle, compensated for the slowdown in major industries such as steel, petrochemicals, and secondary batteries that were suffering from US tariffs, creating the illusion of strong exports.
The Ministry of Trade, Industry and Resources said today that the total value of Korean exports during the first 11 months of this year amounted to $640.2 billion, an increase of 2.9% over the same period last year, which represents its highest level for the aforementioned period in 3 years at $628.7 billion in 2022.
If this trend continues in December, exports will likely exceed $700 billion for the first time this year.
The cumulative value of semiconductor exports until last November amounted to $152.6 billion, breaking the previous annual record of $141.9 billion last year, with one month remaining until the end of the year, which is due to the strong demand for semiconductors against the backdrop of the artificial intelligence boom.
According to export details, the cumulative value of exports excluding semiconductors in the first 11 months of this year decreased by 1.5% from the same period last year to $487.6 billion.
10 major export items out of 15 recorded negative growth, as export growth in the fields of semiconductors recorded 19.8%, cars 2.0%, ships 28.6%, vital health products 7%, and computers 0.4%.
Exports of machinery, petroleum products, petrochemical products, steel, and automobile spare parts decreased by 8.9%, 11.1%, 11.7%, 8.8%, and 6.3%, respectively.
In November, semiconductors represented 28.3% of the country’s total exports, the highest share this year, and the percentage has remained above 20% this year with the exception of February, after recording above 10% in the period between 2002 and 2010.
In a related context, some have warned that the entry of semiconductors into a slowdown will severely affect the entire economy, noting that South Korean exports are excessively focused on them.
Director of the Ministry’s Trade and Investment Office, Kang Kam-chan, said that the high dependence of Korean exports on semiconductors is real, but even excluding this item, exports only decreased by 1.5%, which is a fairly good result.
He added that at the beginning of the year, there were fears that exports of steel, automobiles and petrochemicals would decline due to US tariffs, but they held up better than expected, and ships and biotechnology were the mainstay of exports this year.
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