Chip Boom to Boost Korean Companies' Cash, Goldman Sachs Says

Dow Jones
09/21

0057 GMT - The chip-industry boom is expected to generate substantial corporate cash in South Korea, with the extent to which companies repatriate overseas earnings likely to be a key determinant of domestic financial-market dynamics, Goldman Sachs analysts say. South Korean semiconductor companies are projected to generate roughly 150 trillion won in net cash, equivalent to 4.9% of gross domestic product in 2026, and the figure could rise to 9.3% of GDP in 2027, analysts led by Irene Choi write in a research note. Historically, companies have repatriated around 60% of their foreign-affiliate earnings on average, they note. They expect wage and dividend payments by major chip companies to reach 5.2% of GDP in 2027, the highest level in the available historical data.

 

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