The semiconductor industry, previously buoyed by global advancements in AI, is experiencing a cooling period as demand for memory chips has peaked. Economic analysts suggest that if South Korea's economic momentum slows more than expected next year, the easing cycle will accelerate. Signs of a slowdown in the AI chip sector are evident.
Recent data from South Korea’s government statistics bureau indicates a 3% decline in semiconductor production in September, marking the first drop in 14 months after an 11% increase in August. Additionally, semiconductor shipments rose by just 0.7% in September, a significant decrease from the 17% increase observed in August.
Despite these trends, semiconductor inventories in South Korea are being depleted rapidly, with a year-on-year decrease of 41.5% in September. Meanwhile, Samsung Electronics reported that its semiconductor division's operating profit for the third quarter was 3.86 trillion won (approximately $19.918 billion), falling short of the expected 6.7 trillion won and showing a substantial decline of 40.15% compared to the previous quarter. Since July 9, Samsung's stock price has dropped 32%, erasing $122 billion in market value.
Analysts believe these figures indicate that the boom cycle in the semiconductor industry, driven by global AI developments, is gradually receding. The industry, being a major driver of South Korea's exports and economic growth, is under close watch by the country's central bank. Some economists forecast that any unexpected deceleration in South Korea’s economic momentum next year could expedite an easing cycle.
