South Korea's semiconductor shipments rose by the most since 1997 in December, while inventory growth slowed further, a sign that the country's most important industry is clearing a backlog of computer memory. Data released by Statistics Korea on Wednesday showed that chip shipments increased significantly by 113.7% year-on-year, and inventory increased by 11.6%, the smallest increase since the end of 2022. In addition, output increased by 53.3% year-on-year, the highest level since mid-2016.
Meanwhile, Samsung Electronics (SSNLF.US), the world's largest memory chip maker, announced semiconductor sales of 21.7 trillion won ($16.3 billion) in the last quarter, higher than expected. Despite this, the company's chip unit still recorded an operating loss of 2.2 trillion won, indicating that the decline in South Korea's largest industry has not completely subsided.
South Korean semiconductor manufacturers have been conservative in expanding production since the epidemic-era boom in 2022 caused demand to collapse. Analysts including TrendForce believe that this will help curb the decline in memory chip prices, but it will take some time for the industry to usher in full prosperity again.
South Korea accounts for two-thirds of global memory chip production, and its semiconductor industry is an important indicator of global technology demand. The South Korean government is banking on a continued recovery in semiconductor exports to accelerate economic expansion this year.
"The strength in semiconductor production is consistent with our view that brisk chip exports will help drive South Korea's 2.2% GDP growth this year," said Bloomberg Economics economist Hyosung Kwon.