I was not the only one to find it odd. Companies, too, are confused about the industrial activities reported by Statistics Korea for June. The report published on July 28 showed that semiconductor production decreased by 3.9 percent compared to the previous month and 12.4 percent from the same month last year.
The report came the week when SK Hynix’s quarterly operating profit exceeded 3 trillion won ($2.66 billion) for the first time and Samsung Electronics had 8.3 trillion won in operating profits in the semiconductor division alone. Why do industrial statistics show a decline in production when the industry is thriving? Before I started my research, I sensed that I would not get a clear answer again just as I couldn’t in April. I wrote a report titled “Statistics Korea Does Not Know” in June.
“Actual production fluctuation is calculated based on the production costs submitted by companies, taking Bank of Korea’s producer price into account. We have faithfully adhered to the procedure,” claimed the national statistics office. Then, could the semiconductor price survey be wrong? The Bank of Korea did not clarify. “We cannot specifically disclose what products and prices were surveyed and what weight they have. It could leak business secrets of the company.”
The problem is that the sum of these statistics produces the economic indicator known as gross domestic product (GDP), which is a key indicator that shows economic growth. It is the prime yardstick when deciding whether to raise or cut interest rates or program a supplementary budget.
What’s more frustrating is the silence. No one seems to question statistical data or wants to look into these strange figures. The semiconductor industry should know the reality better than anyone but remains quiet. A Korea Semiconductor Industry Association official said, “It looks odd, but we find it hard to challenge the government’s statistics.”
If the semiconductor production statistics do not reflect reality, what about countless other industrial production statistics?
A financial investment industry source said, “If you take a patient’s temperature wrong, you could prescribe fever reducer to a patient whose temperature was already going down. If the GDP is calculated incorrectly, it could lead to irrelevant economic policies.”
JoongAng Ilbo, Aug. 1, Page 29
*The author is an industrial news writer of the JoongAng Ilbo.