Record deficit at chipmakers

Korea posted a record quarterly trade deficit in the semiconductor industry in the first quarter. The Korea Semiconductor Industry Association said yesterday that the country exported $4.1 billion of semiconductor products but imported $5.2 billion of chip goods. The $1.1-billion deficit was a quarterly record, the association said. South Korea posted a $1.3 billion deficit for the year in 2001, the country’s largest semiconductor trade deficit ever. The association forecast that Korea will record a trade deficit in the semiconductor industry for the third straight year in 2003. The country posted a $6.1 billion trade surplus in semiconductors in 2000. The association attributed the loss to plummeting dynamic random access memory chip prices and sluggish growth in the information technology sector. Meanwhile, imports of non-memory chips surged due to booming exports of mobile handsets and digital home appliances. “Korean companies have a strong foothold in the memory chip business, but are not so competitive in the more cutting-edge areas like non-memory chips,” an association official said. “Korea is expected to post trade deficits in the semiconductor industry for some time.” The official urged the government to invest in non-memory chip businesses. by Ha Ji-yun