Korea chip exports to rebound in Oct; car, cell exports to stay firm
Sul-Gi Lee
Jul 11, 2023 (Gmt+09:00)
South Korea expected overseas sales of semiconductors, the country’s top export item, to rebound from October while the auto, secondary battery and shipbuilding industries are likely to maintain growth momentum, accelerating recovery in Asia’s fourth-largest economy.
The semiconductor industry is expected to benefit more from output cuts by major memory chipmakers from the third quarter, said the Ministry of Trade, Industry and Energy on Tuesday. The country is home to the world’s two largest memory chipmakers – Samsung Electronics Co. and SK Hynix Inc.
“If the improvement in the semiconductor sector and sales to China accelerates, the country is likely to maintain a trend of a trade surplus after September with monthly export growth in the fourth quarter,” the ministry said in its policy report for the second half.
Semiconductor exports in the first half skidded 37.4% to $43.2 billion from a year earlier, putting pressure on the country’s overall overseas sales.
TRADE DEFICITS EXPECTED IN JULY, AUGUST
The country is likely to log trade deficits in July and August due to fewer working days due to summer holidays, the ministry said.
It reported a shortfall of $2.3 billion in the first 10 days of July as exports fell 14.8% to $13.3 billion, according to separate data from the customs office. Overseas sales of semiconductors and petroleum products slumped 36.8% and 51.3%, respectively.
On the other hand, exports of automobiles and ships jumped 25.2% and 74%.
Carmakers, shipbuilders and battery makers are expected to maintain strong production and export momentum, the ministry said.
Shipbuilders including the country’s three major players – HD Hyundai Heavy Industries Co., Hanwha Ocean Co. and Samsung Heavy Industries Co. – are forecast to turn to the black as they were scheduled to export high-value vessels ordered in 2021, the ministry said.
EV battery manufacturers such as LG Energy Solution Ltd. are predicted to keep raising sales with their order backlogs at 775 trillion won ($598.9 billion) as of end-2022, more than 15 times their sales last year, according to the ministry.