South Korea's memory chip exports plummet as demand cools

Exports of South Korea's most lucrative memory chip fell by the most since 2019, according to reports, signaling a further slump in demand for the technology vital to global economic growth.

According to data released by South Korea's trade ministry on Friday (September 16), DRAM shipments fell 24.7% year-on-year in August, after falling 7% in the previous month.

South Korea-based Samsung Electronics and SK Hynix control about two-thirds of the global memory market. Their revenue took a hit in 2019 when the memory chip industry entered a recession cycle.

South Korean technology exports, which account for a third of the country's total overseas shipments, fell 4.6 percent in August, separate data from the ministry showed. Shipments of smartphones, monitors and computers all fell as consumer demand slowed, the Commerce Department said.

There are growing indicators that the global chip industry is cooling after years of booming pandemic demand for electronic devices such as laptops and tablets. The central bank's rapid policy tightening to curb inflation also fueled recession fears.

Global chip sales rose 7.3% in July from a year earlier, the seventh month of deceleration, the Semiconductor Industry Association (SIA) said earlier this month. Separately, delivery times for semiconductors fell again in August, according to Susquehanna Financial Group.

South Korea’s total exports rose by single digits for the third straight month last month, while the trade deficit snowballed to a record due to a weak won and high energy costs. The country has become increasingly reliant on imported high-tech equipment, and Trade Minister Andregen told Bloomberg this week that a weaker won has more negative effects on trade than positives.