Semiconductor market to remain solid ‘at least through next year,’ South Korea finance minister says
Quick Look
- South Korean Finance Minister Lee Hyoung-Il stated the semiconductor boom will continue at least through 2027, citing a wide demand-supply gap and ongoing supply expansion.
- His remarks follow a sharp decline in semiconductor stocks due to interest rate hike concerns and competition from Chinese firms, with SK Hynix, Seoul Semiconductor, and Nvidia affected.
- Lee noted chip stocks have driven volatility in South Korea's market but affirmed the economy remains solid.
AI-generated summary
Why It Matters
Semiconductor stocks have been volatile in 2024 due to shifting demand, interest rate expectations, and global competition, particularly from Chinese firms expanding their market share.
The semiconductor boom will last at least through 2027, South Korean finance minister Lee Hyoung-Il said on Saturday.
"For now, our view is that we can sustain this growth at least through next year," Lee told CNBC on the sidelines of the IMF-World Bank annual meetings in Bangkok. "That's because the gap between demand and supply for semiconductors is still very wide, and supply is still being expanded."
His comments come after semiconductor stocks fell sharply this week, hurt by investor concerns about interest rate hikes and rising competition from Chinese companies. South Korean chip stocks like SK Hynix and Seoul Semiconductor were part of the sell-off, along with U.S. giants like Nvidia .
Chip stocks have fueled volatility in South Korea's stock market this year, Lee said. He attributed the market's wild swings to the semiconductor industry's larger share of the economy than in other countries. Despite the market swings, South Korea's economy is "solid," Lee said.
What to Watch
AI outlook — possibilities, not facts
Semiconductor demand-supply gap will remain wide through 2027
Likely · Within years
Open Questions
- What specific policies is South Korea considering to support its semiconductor industry?
- How will U.S. export controls on advanced chips affect South Korean manufacturers?
- What is the timeline for new semiconductor supply capacity to come online globally?
