Semiconductor exports stage an expected comeback

Containers are stacked at Busan Port on Dec. 1. [YONHAP]

Semiconductors will likely again make up 20 percent of total exports in 2020 after dropping below that key level last year.

The Ministry of Trade, Industry and Energy said chips were 19.4 percent of exports between January and November. The total was 89.7 billion won ($82.2 million), up 3.5 percent from the same period last year.

Semiconductors are the largest export category.

But December could tip the annual total to above 20 percent, local media outlets predict, given that exports between Dec. 1 through 10 jumped by 52.1 percent over a year ago.

In 2018, chip products accounted for 20.9 percent of the total, a record high, as prices surged. But the trend turned last year as the cycle peaked and the U.S.-China trade war heated up.

Now, with the demand for chips up due to the pandemic and the need for processing power at data centers and in home computing, chips are mounting a comeback.

Some analysts are saying the market is entering another “super cycle” as the prices of memory chips — especially dynamic random-access memory (DRAM) chips — are set to rally in the first half of the year.

Bolstered by optimistic prospects, the shares of Korea’s major chip producers, such as Samsung Electronics and SK hynix, hit their all-time highs last week.

Other major exports struggled as they have been on the losing side of the pandemic-stricken global economy.

Automobiles, displays and steel lost ground as a percentage of overall exports between January and October, according to the Korea International Trade Association (KITA).

Car exports as a percentage of total exports fell by 0.7 percentage points to 7.2 percent during the period over a year ago, while those of flat panel displays shrank by 0.4 percentage points to 3.4 percent.

Steel plates accounted for 3.2 percent of total exports in the 10-month period, down 0.2 percentage points on year, and petrochemicals almost halved to 4.9 percent from 7.5 percent.

Emerging export items like biopharmaceuticals and cosmetics posted robust growth.

Exports in biopharmaceutical products increased by 49 percent to $12.24 billion this year through November, while cosmetics jumped by 15.7 percent to $6.89 billion.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]