South Korean Finance Minister Lee Hyung-joo stated on Saturday that the semiconductor boom is expected to last at least until 2027.
During the interval of the annual meetings of the International Monetary Fund and the World Bank held in Bangkok, Lee Heng-il said in an interview with CNBC: "At present, we believe that this growth can at least continue until next year." He stated, "This is because the gap between semiconductor supply and demand is still very large, and the supply continues to expand."
His statement came after a significant decline in semiconductor stocks this week. Previously, investors were concerned about interest rate hikes and intensified competition from Chinese companies, which dragged down chip stocks. Korean chip stocks such as SK Hynix and Seoul Semiconductor, as well as the American giant NVIDIA, were among those affected by this round of selling.
Lee Hyeong-il said that chip stocks have driven fluctuations in the South Korean stock market this year. He attributed the sharp market swings to the semiconductor industry's larger proportion in the South Korean economy compared to other countries. Despite the market volatility, Lee Hyeong-il stated that the South Korean economy is “stable.”
On Thursday, an opinion column in a well-known South Korean media outlet, "The Daily Economic News," called on the South Korean government to prepare for the upcoming slowdown in the artificial intelligence boom. According to the translation provided by CNBC, the author of the article stated that two experts predict that new semiconductor supplies will flood the market, turning the memory market into a "red ocean" by 2029.
Lee Hyeong-il also said that although South Korean semiconductors may be causing fluctuations in the stock market, the industry has also contributed to increased tax revenue. He stated that South Korea expects to collect more taxes this year than initially anticipated.
He added that ultimately, due to the prosperity of the chip industry, South Korea's fiscal situation will be stronger.
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