Capital Economics: South Korea's Semiconductor Boom May Cool Within Two Years

Capital Economics economist Marcel Thieliant stated that while South Korea's GDP growth faces upside risks in the short term, the semiconductor-driven economic boom may lose momentum in the next two years. He predicts that the U.S. AI investment boom will cool down by 2028, prompting South Korean chip manufacturers to cut capital expenditures due to the highly cyclical nature of the semiconductor industry. Thieliant noted that Samsung Electronics and SK Hynix announced an investment plan totaling 800 trillion won to build new chip manufacturing plants in the southwest of South Korea, but the specific timeline for the investment has not been disclosed. He also mentioned that in 2023, SK Hynix reduced its capital expenditures by two-thirds due to the reversal of the post-pandemic electronics boom.

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