Semiconductors: Between sentiment and reality

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Semiconductors: Between sentiment and reality

Published: 16 Jan. 2026, 00:05

Audio report: written by reporters, read by AI

Baek Woo-jin

The author is an economic columnist and the CEO of Geuljaengi Inc.

Samsung Electronics overtook Intel in semiconductor revenue in 2017 to become the world’s largest chipmaker. A year later, in 2018, an unusually optimistic assessment gained traction, arguing that Samsung’s “super-gap” strategy in technology development had begun to deliver results so decisive that no global rival could hope to close the distance. That year also marked the peak of the memory semiconductor cycle.

Samsung Electronics' Seocho office building in southern Seoul [YONHAP]

The industry then entered a prolonged downturn, punctuated by volatility, before hitting bottom in 2023. Samsung’s Device Solutions division, which produces semiconductors, recorded operating losses approaching 15 trillion won ($10.1 billion) that year. SK hynix managed to keep its operating loss below 8 trillion won. As performance deteriorated, calls emerged from political circles for the Korean government to subsidize semiconductor investment, mirroring moves by the United States, the European Union and Japan, all of which had pledged large sums to bolster domestic chip industries. Without comparable support, critics warned, Korea risked falling behind in the global investment race.

In May 2024, the government announced a 26 trillion won support package for the semiconductor industry, centered on low-interest loans and infrastructure development. Some argued the plan fell short because it excluded direct subsidies. Contrary to those concerns, capital investment led by the semiconductor sector rose by more than 4 percent from a year earlier.

Korea’s semiconductor industry was, in fact, climbing through the pessimism. SK hynix, driven by high bandwidth memory products, posted operating profits exceeding 23 trillion won in 2024. Samsung’s Device Solutions division also returned to the black. Earnings surged last year, with SK hynix’s operating profit estimated at 44 trillion wonand Samsung’s semiconductor unit believed to have generated about 16 trillion won in operating profit in the fourth quarter alone.

Perceptions of Korea’s semiconductor industry tend to swing more violently than the underlying reality and often lag behind it. For investors, a simple maxim may be worth keeping in mind: this too shall pass.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.