Electronics

On May 11th local time, import and export data released by the South Korean Customs Agency showed that due to the continued downturn in global semiconductor demand, South Korea's export volume in the first 10 days of May decreased by 10.1% year-on-year, to $14.5 billion.

Import and export data shows that in the first 10 days of May, South Korean imports decreased by 5.7% year-on-year to $18.7 billion, resulting in a trade deficit of $4.2 billion. From the perspective of product categories, in the first 10 days of May, South Korean chip exports decreased by 29.4% year-on-year, to 1.97 billion US dollars. Exports of petrochemical and steel products decreased by 40.1% and 3.8%, respectively, to $1.45 billion and $1.11 billion. However, automobile exports have more than doubled to $1.34 billion.

According to import and export data, from the perspective of export destinations, exports to China decreased by 14.7% year-on-year to $3.2 billion. Exports to the United States increased by 8.9% to $2.5 billion. Exports to the European Union increased by 11.5% to $1.6 billion. Exports to Vietnam decreased by 9% to $1.3 billion. Since October last year, South Korean exports have continued to decline, and as of April this year, they have been declining for seven consecutive months.

According to the report released by the Korea Development Institute (KDI) on the 10th, import and export data show that in the first quarter of 2023, South Korea's semiconductor exports decreased by 40% compared with the same period last year. The report predicts that the semiconductor market will bottom out in the second and third quarters of 2023. A research member from the Economic Outlook Office of the Institute stated that considering the increasing demand for computers and smartphones, the semiconductor industry market may begin to recover in mid-2024. However, due to the high uncertainty of the global economy in 2024, the specific situation is difficult to predict.

The think tank stated that if semiconductor exports decrease by 10%, South Korea's gross domestic product (GDP) will decrease by 0.78%. Analysis indicates that the recent downturn in the semiconductor industry is mainly due to sluggish sales of storage chips. Due to the concentration of South Korea's semiconductor industry on storage semiconductors, the country's economy has been more affected by the decline in the semiconductor industry.

However, according to the latest released "Economic Trends in May", although the significant contraction in exports has led to sustained economic downturn, the recovery of domestic demand in South Korea has prevented a rapid economic downturn.

With the increase in service industry production and the easing of sluggish retail sales, consumption shows signs of slow recovery. Specifically, in March, the production of the service industry increased by 6.2% year-on-year, while the accommodation and catering industry, transportation and warehousing industry, among others, maintained an upward trend. Against this backdrop, retail sales in March increased by 0.5% year-on-year, with durable goods sales increasing by 3.3% year-on-year. According to the category, the sales of passenger cars remain on the rise. The consumption of semi durable goods such as clothing also maintained an upward trend, increasing by 5.1% year-on-year.

At the same time, according to import and export data, South Korea's Consumer confidence index rose year-on-year in April to 95.1. In addition, according to the analysis of the labor market, the service industry in South Korea, which holds a large proportion of jobs, has maintained a good momentum, driving the growth of employment.