Economy
Bank of Korea Warns Chip Exports Could Fall by Up to $100 Billion if AI Spending Slows
South Korea's semiconductor exports could fall by $50 billion to $100 billion from earlier forecasts if major US technology firms slow their AI capital spending next year, the Bank of Korea warned in a pessimistic scenario.
Photo: Raimond Spekking / Wikimedia Commons (CC BY-SA 4.0). Photo shows a memory chip, not a specific Korean export.
South Korea's semiconductor exports could fall by $50 billion to $100 billion compared with earlier forecasts if capital spending on artificial intelligence by major US technology firms slows next year, according to central bank data cited by Reuters on Tuesday.
The Bank of Korea modelled the pessimistic scenario in a written response submitted to lawmaker Ahn Do-geol, to assess the economic fallout if US tech giants curb their aggressive infrastructure outlays.
Under the scenario, a sudden export shortfall would shave approximately 0.4 percentage point off South Korea's gross domestic product growth rate next year, by driving the country's current account surplus well below the central bank's initial projection of $430 billion for 2027. The scenario assumed a 10% decline in Korean semiconductor unit prices.
The assessment underscores South Korea's heavy reliance on chips, which account for roughly half of its exports. Combined capital expenditure by five major US technology firms — Amazon, Google, Microsoft, Meta and Oracle — has grown rapidly, from $40 billion last year to an estimated $80 billion this year, and is projected to reach $110 billion next year, according to the report.
However, the Bank of Korea cautioned that considerable uncertainty remains over the trajectory of AI demand and the broader memory chip business cycle.
Source: Reuters
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