The South Korea chip boom is likely to extend at least through 2027, Finance Minister Lee Hyoung-Il said Saturday, pointing to a persistent imbalance between demand and supply that continues to support the sector.
Speaking on the sidelines of the IMF-World Bank annual meetings in Bangkok, Lee said the government’s baseline view is that the current upcycle can be maintained into next year because the supply gap remains wide and producers are still adding capacity. He offered the remarks days after a sharp pullback in semiconductor shares fueled by concerns over higher interest rates and intensifying competition from Chinese firms.
South Korean chip makers, including SK Hynix and Seoul Semiconductor, were caught in this week’s sell-off alongside major U.S. names such as Nvidia. Lee noted that chip stocks have amplified volatility in Seoul’s equity market this year, attributing the swings to semiconductors’ outsized role in the national economy compared with other countries. Despite the turbulence, he said the broader economy remains solid.
South Korea chip boom and market outlook
Lee’s comments follow a domestic debate about how long artificial intelligence-driven demand can prop up the industry. An opinion column in Maeil Business Newspaper urged policymakers to prepare for a potential slowdown, citing two experts who expect a surge of new supply that could turn the memory market highly competitive by 2029.
Even with recent market swings, the government expects stronger tax receipts this year than initially forecast, Lee said. He added that the ongoing upswing in semiconductors should ultimately leave South Korea in a more robust fiscal position.
