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KEI Spotlight

Is This the End of South Korea’s Semi-Charmed Export Life?

January 15, 2019

KEI Senior Director Troy Stangarone's latest column on the Diplomat Magazine tackles the risks that come with South Korea's heavy dependence on the semiconductor industry.

The rise in demand for semiconductors in the late 2010s had helped South Korea bounce back from a slump in exports. But as a result, South Korea’s economy has increasingly become reliant on one company – Samsung – and it has increasingly become reliant on semiconductors. This – Stangarone argues – presents a serious problem as global demand for semiconductors is flattening. This trend is partly driven by the trade war between China and the United States. Simultaneously, China's pursuit of indigenous semiconductor technology will drive down demand for Korea's chips in the long-term even if tensions between China and the United States subside. 

Samsung and SK Hynix are looking for ways to diversify – and adaptability will be vital for the long-term growth of the Korean economy. 

Read the full article here