South Korea’s semiconductor exports to the world’s second-largest economy, China, have fallen drastically last month as the US tightens restrictions on China and ramps up tariff pressure on the country.
Chip sales to China including Hong Kong fell 31.8% from a year earlier, according to South Korea’s Trade Ministry.
That fall is more than the 22.5% contraction reported for January. The figures do not reveal exports by individual companies, but Samsung Electronics and SK Hynix are among South Korea’s major chip manufacturers.
The two companies also operate semiconductor plants in China. The country received about two-fifths of South Korea’s entire technology exports as of the end of 2024, according to Bloomberg.
South Korea’s total semiconductor exports decreased 3% from a year earlier in February. The ministry attributed the export slowdown to declining prices in conventional memory chips and a technological transition in semiconductor production.
The US has implemented export restrictions on cutting-edge semiconductors to China as it attempts to keep the Asian country from advancing in the fields of artificial intelligence.
Apart from seeing its sales to China come under renewed pressure, Samsung is also facing increasing competition in the US.
Taiwan Semiconductor Manufacturing Co has reportedly reached out to US chip designers Nvidia, Advanced Micro Devices and Broadcom about taking stakes in a joint venture that would operate Intel’s factories.
Under TSMC’s proposal, the Taiwanese chipmaker will operate Intel’s foundry division, but would not own more than 50%, reported Reuters. TSMC wants potential investors in the JV to be customers of Intel’s manufacturing facilities.
If TSMC’s proposal does proceed as planned, Samsung’s foundry business could be in “serious jeopardy”, industry experts have warned.
The 10 top global semiconductor companies are cutting billions of dollars in planned capital spending as they are forced to contend with softening demand from EV makers and smartphone manufacturers.
The global semiconductor market was valued at A$1.01 trillion in 2024, according to the World Semiconductor Trade Statistics, up 19% year-on-year.
Investment plans for each of the company’s fiscal 2024 show an aggregate 2% decrease year-over-year to A$199.21 billion, an approximately A$15.36 billion decrease from their May estimates, according to Nikkei Asia.
Samsung Electronics’ semiconductor investments for 2024 decreased 1% to about A$56.55 billion, the first decline in five years.
