Bank of Korea warns country's chip exports could fall by up to $100 billion if AI spending slows
SEOUL: 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. In a written response submitted to lawmaker Ahn Do-geol, the Bank of Korea (BOK) modelled a “pessimistic scenario” to assess the economic fallout if US tech…
South Korea's semiconductor exports could see a significant drop of $50 billion to $100 billion due to a slowdown in capital spending on artificial intelligence by major US technology firms, according to data from the Bank of Korea (BOK). The central bank modeled a "pessimistic scenario" to gauge the economic impact should US tech giants reduce their infrastructure investments.
Under this scenario, a sharp export decline would reduce South Korea's GDP growth rate by approximately 0.4 percentage points next year, causing the country's current account surplus to fall well below the central bank's projected $430 billion for 2027. This projection is based on an assumption of a 10% decrease in Korean semiconductor unit prices.
The assessment highlights growing concerns over South Korea's heavy dependence on chips, which constitute roughly half of its exports. The report noted that combined capital expenditure by five major US tech firms, including Amazon, Google, Microsoft, Meta, and Oracle, has been increasing rapidly, from $40 billion last year to an estimated $80 billion this year, with projections of reaching $110 billion next year.
However, the BOK warned that there remains significant uncertainty surrounding the outlook for AI demand and the broader memory chip business cycle.
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