Key Takeaways:
- South Korean Finance Minister Lee Hyung-il expects the global chip boom to continue through at least 2027.
- South Korea’s KOSPI stock index fell 14.46% during a week of market turmoil.
- Strong demand and limited chip supply could boost the country’s tax revenue.
South Korea’s Economy and Finance Minister Lee Hyung-il said at international meetings in Bangkok that the global semiconductor boom would last at least through 2027. He rejected warnings that the market could soon face a glut of chips.
South Korea chip boom outlook: finance minister rejects glut warnings
Lee spoke to global economic leaders at the annual meetings of the International Monetary Fund and the World Bank in Bangkok. He said global demand for chips remains much higher than the industry’s ability to produce them. He expects the South Korea chip boom to continue through at least 2027 as global demand for semiconductors outpaces supply.
Lee also pushed back against forecasts that the memory chip market could face too much supply by 2029. He said that even as chip production grows, demand is still expected to outpace supply. He added that continued growth in the chip industry could raise South Korea’s tax revenue and strengthen government finances.
South Korea chip boom faces stock market volatility
Lee made his comments after sharp swings in South Korea’s stock market. The KOSPI index fell 14.46% in one week. Samsung Electronics and SK Hynix, two major South Korean chipmakers, recorded their biggest weekly stock declines since the 2008 financial crisis.
Analysts linked the market drop to a sharp fall in CoreWeave bond prices, which raised concerns about whether AI-related businesses can make enough money to justify their costs. At the same time, rising US Treasury yields pushed up borrowing costs for companies, putting more pressure on technology stocks.
NVIDIA event and tech earnings could shape markets
Investors are now watching upcoming events, including Nvidia’s GTC conference and earnings reports from major technology companies. These updates could help show whether demand for advanced chips and other computing hardware remains strong.
Some market watchers warn that wider economic pressures could keep stock prices unstable. If concerns about company profits grow, markets could remain unsettled for longer. South Korean officials, however, say the chip industry remains strong at its core.
