① South Korea's semiconductor production increased 65.3% year-on-year in February, the biggest increase in 14 years; ② semiconductor inventories have been declining for two consecutive months, which is another sign of strong demand; ③ The biggest driving force in the increase in semiconductor production is the surge in global demand for artificial intelligence-related memory chips.
Financial Services Association, March 29 (Editor Zhou Ziyi) There are more signs that global demand for technology continues to recover. According to the latest data, South Korea's semiconductor production recorded the biggest increase in 14 years in February, and the semiconductor industry is the country's most important industrial sector.
According to data released by the Korea Statistics Agency on Friday (March 29), semiconductor production increased 65.3% over the same period last year, the biggest increase since the end of 2009; semiconductor shipments also increased 59% year on year, but down from 62.7% in January.
Additionally, semiconductor inventories fell 16.2%, for the second month in a row, another sign of strong demand.
The report shows that South Korea's overall industrial production growth has exceeded expectations. Given that semiconductors account for the largest share of South Korea's exports, this favorable data also indicates that South Korea's domestic economic growth will continue.
Earlier, some analysts said that after a year of sluggish exports have turned to growth since October last year, and are expected to improve further this year, becoming the main driving force for economic growth.
AI is the biggest driving force
Other data indicates that the country's semiconductor production may continue to grow. Chip exports in the first 20 days of March increased by 46.5% compared to the same period last year. The biggest driving force in this growth is the surge in global demand for artificial intelligence (AI) related memory chips.
Recently, SK Hynix, the second-largest chipmaker in South Korea, said its supply to Nvidia will continue to maintain a positive momentum. As Nvidia's only HBM3 supplier, SK Hynix issued a press release after the Nvidia GTC 2024 conference this month announcing that mass production of the high-bandwidth memory product HBM3E has begun and will be supplied to customers starting in late March. People familiar with the matter revealed that the first batch of products was delivered to Nvidia.
Economist Hyosung Kwon pointed out, “We expect semiconductor production to grow steadily in March, driven by strong external demand for artificial intelligence memory chips.”
As the backbone of the Korean semiconductor industry, the memory chip market is known for its strong cyclicality. The rising boom in this market has made the Bank of Korea more confident that it will maintain its austerity policy to continue fighting inflation.
Statistics Office data also showed that overall industrial output increased by 4.8% in February, higher than the 4% predicted by economists. Based on this data, the Ministry of Finance said that the economic recovery momentum is becoming more obvious.