[COVER STORY] Korea's chip-driven growth faces risks from potential US data center curbs

Korea's chip-driven economic growth is facing potential risks due to the possibility of U.S. data center curbs, according to analysts. A sharp stock market decline, driven by fears of such restrictions, could have far-reaching effects on the real economy. If implemented, these curbs could jeopardize semiconductor exports and dampen growth prospects for the coming year, analysts have cautioned.

The Democrats' victory in the U.S. midterm elections last week has raised speculation that the party might advocate for stricter oversight of data center projects, although no specific measures have been announced yet. Korea's economy has been buoyed by the global AI boom this year, with semiconductor exports playing a crucial role in driving growth.

Semiconductors accounted for 49 percent of the country's total exports in October, and the Bank of Korea estimates that the industry will contribute around half of the nation's economic growth this year. These concerns have already impacted Korean stocks, with the benchmark KOSPI and secondary bourse Kosdaq falling by 10.43 percent and 8.54 percent respectively over the past three trading sessions.