chip exports plummet: south korea feels the squeeze from us-china tech war

2025-03-17 general

Seoul, Monday, 17 March 2025.
South Korea’s semiconductor exports to China have fallen 31.8% year-on-year. This decline, steeper than January’s 22.5% drop, signals growing worries about global demand. Tightened US restrictions on technology exports to China are a key factor. The restrictions could hurt major players like TSMC and Samsung. These companies rely heavily on the Chinese market. The US aims to curb China’s progress in areas like artificial intelligence. Major chip manufacturers SK Hynix and Samsung operate plants in China. China’s share of South Korea’s tech exports has already decreased from previous highs.

broader economic impact

South Korea’s total semiconductor exports experienced a slight decrease of 3% in February [6]. This slowdown is attributed to falling prices for conventional memory chips [6]. It also reflects ongoing technological shifts in semiconductor production [6]. These challenges in chip exports pose a threat to South Korea’s overall economic outlook [5]. Concerns are rising that the South Korean economy may decelerate compared to 2024, influenced by US tariff policies and weak consumer spending [5].

competition and capital spending

Samsung faces increasing competition in the US market [6]. TSMC has approached US chip designers like Nvidia, AMD, and Broadcom [6]. The proposal involves taking stakes in a joint venture to operate Intel’s factories [6]. Under the TSMC plan, TSMC would manage Intel’s foundry division [6]. However, TSMC would not own more than 50% [6]. Experts suggest Samsung’s foundry business could face serious risks if TSMC’s proposal materializes [6]. The top ten global semiconductor companies are reducing capital spending due to softening demand from EV and smartphone makers [6].

market valuation and investment trends

The global semiconductor market was valued at A$1.01 trillion in 2024, showing a 19% year-on-year increase [6]. However, investment plans for fiscal year 2024 indicate an aggregate decrease of 2% year-over-year, totaling A$199.21 billion [6]. This represents an approximate A$15.36 billion decrease from earlier estimates [6]. Samsung’s semiconductor investments for 2024 decreased by 1% to approximately A$56.55 billion, marking the first decline in five years [6].

Bronnen

export restrictions china trade