South Korea's semiconductor production has declined year-on-year for the first time in over a year, once again indicating that the boom cycle driven by global artificial intelligence (AI) development may begin to cool down.
According to data released by the South Korean Government Statistics Office on Thursday (October 31), semiconductor production in South Korea fell by 3% in September, a significant reversal from the previous month's growth of 11%. The growth in shipment volume has also slowed down from 17% in August to 0.7%.
However, inventory levels indicate that inventory is still rapidly depleting, with inventory in September decreasing by 41.5% compared to the same period last year. These numbers depict that the industry may be gradually cooling down as demand for storage chips has peaked.
On Thursday, Samsung Electronics released its financial report showing that its semiconductor division's operating profit fell short of market expectations, with a third quarter profit of only 3.86 trillion Korean won, lower than the market's general expectation of 6.7 trillion Korean won.
Semiconductors are the biggest driving force behind South Korea's exports and economic growth. The Bank of Korea is also closely monitoring the performance of these currencies, and in early October, it began to lower benchmark interest rates and adjust policies. Some economists predict that if economic growth slows down more than expected next year, the easing cycle will accelerate.
