Bank of Korea Warns South Korean Chip Exports Could Fall by as Much as $100 Billion if AI Spending Slows

Deep News
4 hours ago

According to data from the Bank of Korea, South Korea's semiconductor exports could be reduced by $50 billion to $100 billion compared with previous forecasts if large American technology companies slow their capital spending on artificial intelligence next year.

In written replies submitted to lawmaker Ahn Do-geol, the Bank of Korea constructed a "pessimistic scenario" aimed at assessing what kind of shock South Korea's economy would suffer if U.S. tech giants cut back their massive infrastructure investment. Under this scenario, the sharp drop in exports would cause South Korea's GDP growth rate next year to fall by about 0.4 percentage points; at the same time, it would also push South Korea's current account surplus far below the Bank of Korea's previous forecast of a $430 billion surplus for 2027. The scenario assumes that the unit price of South Korean semiconductor products will fall by 10%.

This assessment highlights growing concerns: South Korea's economy is highly dependent on the semiconductor industry, and semiconductor exports account for about half of South Korea's total exports.

The report noted that the total capital spending of the five major U.S. technology companies — Amazon, Google, Microsoft, Meta and Oracle — is growing rapidly, rising from $40 billion last year to an estimated $80 billion this year, and is expected to reach $110 billion next year. However, the Bank of Korea cautioned that considerable uncertainty remains regarding the trajectory of artificial intelligence (AI) demand and the broader memory chip business cycle.

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