Is South Korean memory likely to be pinched by China? Korean media warns that Rongjing may have 3 years left, Musk reveals one incident

South Korea’s memory industry is enjoying a super boom, but how long can the good times last? Korean media published a column on the 15th warning that as global memory factories aggressively expand production, oversupply may occur in 2029, and South Korea only has a golden window of 2 to 3 years left. Tesla CEO Musk also forwarded relevant news on the social platform

South Korea's "Main Economic News" pointed out in a column titled "How Long Can South Korea's Semiconductor Boom Last?" that Samsung Electronics and SK Hynix are benefiting from the memory super cycle and are comprehensively rewriting South Korea's economic indicators. Samsung's market capitalization reaches 1,500 trillion won, and SK Hynix's reaches 1,000 trillion won. South Korea's exports are expected to reach US$1 trillion this year, of which semiconductors account for 48%, and per capita GDP is expected to approach US$45,000.

However, behind the prosperity lies the risk of being highly dependent on a single industry. South Korea's exports of semiconductor and IT products in the first half of the year were approximately US$220 billion, much higher than the US$35.9 billion of the automobile industry and US$30 billion of the petrochemical industry. The column bluntly stated that South Korea has become a "semiconductor republic", and everything from economic growth, government taxes, exchange rates to wages are closely linked to the semiconductor boom.

The column pointed out that the global semiconductor market usually accounts for 20% of memory and 80% of non-memory. However, driven by AI demand, the size of the memory market is estimated to reach US$837 billion this year, accounting for more than half of the overall US$1.55 trillion market. Although South Korea has an advantage in the memory field, the non-memory market is dominated by American companies such as Huida, Intel, and Broadcom. Wafer foundry is TSMC's strength.

The column bluntly stated that South Korea's fate is like a sword of Damocles hanging above its head. Behind the semiconductor boom, there is an imminent crisis hidden. Huang Zhecheng (transliteration), a professor at Seoul National University, and Ahn Ki-hyun (transliteration), executive director of the Korea Semiconductor Industry Association, believe that it will still be a relatively safe period before 2028, but new production capacity will be gradually opened from 2029, and the market may turn to oversupply, and even end the super cycle around 2030.

Competitive pressure also continues to rise. Micron is significantly expanding its Idaho factory in the United States. The column also quoted an assessment that the technology gap between China's Changxin Memory and Yangtze Memory and leading players has narrowed to 1 to 2 years.

Warning, South Korea only has 2 to 3 years left to develop new growth industries. If not prepared in time, once the memory economy reverses, exports may fall below US$1 trillion, which may even trigger a trade deficit, a sharp depreciation of the Korean won, and a decline in national income. The prosperity brought about by semiconductors may also become the biggest hidden worry for South Korea's economy. How to prepare for the era after the semiconductor boom ends will become the key to the direction of the next South Korean presidential election.