South Korea’s warehouses of unsold chips grew faster in January 2023 than in almost 27 years. Inventory jumped 28% from the month before, the biggest monthly rise since February 1996, according to the Korean statistics agency. Against January 2022, the stockpile was up 39.5%.
Chips matter here more than in most economies. Semiconductors made up about 12% of South Korea’s total exports that month, Bloomberg reported, so trouble in the sector shows up quickly in trade figures. Global demand for chips has been falling. The economy shrank in the last quarter of 2022, and the new quarter looked hard as exports kept sliding.
The wider technology sector tells the same story. The science ministry’s data put January ICT exports at $13.1 billion, down 33.2% from a year earlier. That was the seventh straight monthly decline, running back to July of the previous year.
There is also a political squeeze. The report said Washington is pressing Seoul to cut its reliance on China for chip sales and production, which could add to the pressure on the industry.
For electronic component distributors, SmBom noted, the stockpile build-up may change how they plan supply and sourcing.
