South Korea's industrial production in October fell at its steepest rate since February 2020 due to a drop in semiconductor production.

The industrial output fell 2.5% from September, according to Friday's report from the Ministry of Data and Statistics.

Mining and manufacturing dipped 4%, with semiconductor production slumping 26.5%. This was the highest month-on-month drop since October 1982, according to The Korea Herald.

The ministry attributed the drop to a strong base effect as the production of semiconductors soared about 20% in the prior month, The Korea Herald reported.

However, demand for semiconductors is expected to remain growing. ING forecasts that robust demand for chips will help boost exports in November.

Some of Korea's biggest chipmakers are making ways to improve their production and organization to advance their chip technology.

Samsung Electronics (KRX:005930) launched a new memory development unit as part of an organizational overhaul. The new unit is expected to develop next-generation high-bandwidth memory (HBM) technologies.

Samsung's rival, SK Hynix (KRX:000660) seeks to expand its production capacity as planned supply for 2026 was sold out.