Are the best days numbered? South Korea's Finance Minister: Memory boom can last until at least 2027

South Korea's Deputy Prime Minister and Finance Minister Lee Hyoung-il said the boom in the semiconductor industry will continue until at least 2027.

Global stock markets were in turmoil last week, chip stocks were hit hard, and the South Korean stock market was also affected. In this regard, South Korean Deputy Prime Minister and Finance Minister Lee Hyoung-il (Lee Hyoung-il), who attended the annual meetings of the International Monetary Fund (IMF) and the World Bank in Bangkok, said in an interview with "CNBC" on the sidelines on the 17th that the prosperity of the semiconductor industry will continue until at least 2027.

Li Jiongil said: "Currently, we believe that this growth can be maintained at least until next year. This is because the gap between semiconductor supply and demand is still large and supply still needs to be expanded."

Including South Korea's two largest memory chip manufacturers, Samsung Electronics and SK Hynix, as well as major U.S. semiconductor manufacturers such as Nvidia, their stock prices have plummeted last week, mainly because investors are worried about possible rises in interest rates and intensified competition from Chinese companies.

Lee Hyung-il pointed out that chip stocks have intensified the volatility of the South Korean stock market this year, and attributed this to the fact that the semiconductor industry accounts for a larger proportion of the overall economy than other countries. Despite sharp fluctuations in the stock market, Ri Hyung-il stressed that South Korea's economy is "very solid."

The South Korean media "Daily Economic News" recently published a column stating that the South Korean government should be prepared for the upcoming AI boom to slow down, and warned that after new production capacity is gradually opened, the global memory chip supply will be oversupplied in 2029, falling into "Red Ocean" competition, and may even enter a downturn in 2030.

The article said that South Korea only has 2 to 3 years left to develop new industries to drive growth. If it is not prepared in time, once the memory chip boom reverses, exports may fall below US$1 trillion (NT$32.3 trillion), and even trigger a trade deficit, a sharp depreciation of the Korean won, and a decline in per capita national income.

American billionaire Musk also forwarded this article on the X platform, pointing out: "China will mass-produce random access memory (RAM) in 2028."

However, Bank of America issued a report stating that the recent decline in memory chip stocks has exceeded the range of reasonable expectations for the industry outlook, and it expects prices and profit margins to continue to be supported until 2028.