Capital Economics Warns South Korea's Chip-Led Expansion May Stall by 2028

Deep News08-13

According to Capital Economics' Marcel Thieliant, while there are near-term upside risks to South Korea's gross domestic product growth, the nation's semiconductor-driven economic boom could lose momentum within two years. The economist predicts that the artificial intelligence investment surge in the United States may wane by 2028, potentially prompting South Korean chip manufacturers to begin cutting capital expenditures, given the highly cyclical nature of the industry.

Thieliant noted that Samsung Electronics Co., Ltd. and SK Hynix have announced a combined investment plan totaling 800 trillion won to construct new chip fabrication plants in southwestern South Korea, though the timeline has yet to be disclosed. He pointed out that SK Hynix slashed its capital expenditure by two-thirds in 2023 as the post-pandemic electronics boom reversed.

This article is for reference only and does not constitute investment advice.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap
Leave a comment