South Korean Think Tank: Chip Boom Offsets Weakness in Manufacturing, South Korea's Economy Remains on Recovery Track

Golden Ten Data reported on July 8 that South Korea’s official think tank stated Wednesday that the country’s economy remains on a recovery track, with prosperity in the chip industry offsetting a slowdown in overall manufacturing. The Korea Development Institute (KDI) noted in its monthly economic assessment report that, driven by robust demand related to artificial intelligence, South Korea’s exports continued to expand “strongly.” In June, South Korea’s monthly exports surpassed $100 billion for the first time, reaching $102.25 billion, a year-on-year increase of 70.9% and a new record high. KDI stated: “Although the growth rate of semiconductor export volumes has somewhat slowed, the export value remains strong, supported by ongoing price increases.” Boosted by surging demand for memory chips, semiconductor export value nearly tripled to $44.82 billion, with monthly exports exceeding $40 billion for the first time. However, KDI pointed out that manufacturing output has slightly declined because “the momentum from the earlier rapid growth in semiconductors has moderated and other sectors remain sluggish.” KDI added that high oil prices and a weaker won against the US dollar may “continue to put upward pressure on prices, increasing the risk of further interest rate hikes and potentially hampering a recovery in consumption.”