South Korea Chip Output Drops for First Time in 4 Years as Demand Declines

Chip production in South Korea fell for the first time in more than four years as chipmakers face slowing global demand amid a looming global economic recession.

Statistics Korea data released on Friday showed that semiconductor production dropped 1.7% from a year earlier, reversing a 17.3% increase seen in July.

With production down for the first time since January 2018 and chip stocks up 67.3%, it seems manufacturers are responding to a worsening global outlook by cutting back. The statistics office also reported a decrease in factory shipments of 20.4% in August, making it the second consecutive month of decline.

New data suggests a global economic slowdown is imminent, with the decline in electronics demand serving as a primary catalyst, said Bloomberg.

South Korea’s biggest export is semiconductors, so a drop in demand for these products has cast a shadow over the country’s economic outlook in the face of rising energy prices and a depreciating won.