Demand for memory chips in consumer electronics has clearly cooled, although demand for chips in cars remains in short supply.
Financial Union June 30 - (editor Liu Rui) although the car chip is still in short supply, but consumer electronics memory chip demand has obviously cooled.
South Korea's national chip inventory rose 53.4% in May from a year earlier, the largest increase in more than four years and a sign of a significant slowdown in global demand for memory chips in consumer electronics, the national Statistics Bureau said Thursday.
The last time inventory growth was this large was In March 2018, when the global memory chip industry saw a slowdown in revenue growth and a 54.1 percent year-over-year increase in inventory.
Chip inventories have been rising year-on-year since October.
South Korea is the world's largest producer of memory chips, accounting for a huge share of global output in everything from smartphones to laptops to cars. At the same time, chips are one of the biggest drivers of South Korea's economy.
The build-up in chip inventories comes amid growing fears that inflationary pressures, rising interest rates, deteriorating consumer confidence and the ongoing conflict between Russia and Ukraine could lead to a global recession.
Shares of South Korean chip giants such as Samsung Electronics Co. and SK Hynix Co. have fallen over the past year as questions about future chip demand and global central bank tightening have weighed on investment in technology stocks.
The report also showed slowing growth in semiconductor shipments and production. Semiconductor shipments in South Korea rose just 8.9% in May from a year earlier, the first single-digit increase since October 2019, according to Statistics Korea. Meanwhile, South Korea's chip production growth slowed to 24.3 per cent year-on-year in May, the slowest pace since February 2021.
However, South Korea's overall industrial production recovered from a drop in April as the impact of the outbreak in China eased recently. South Korea's industrial output rose 7.3% in May from a year earlier, beating economists' forecasts of 4%.