Korea's Semiconductor Exports to China Increasing

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www.businesskorea.co.kr, Nov. 10, 2020 – 

Even after the United States began to regulate Korean companies' semiconductor exports to Huawei, Korea's semiconductor exports to China have increased.

Korea's semiconductors exports to China in the first nine months of 2020 stood at US$28.6 billion, a 7.8 percent increase from a year earlier. China accounted for 41.57 percent of Korea's total semiconductor exports, the highest since 2016, said the Ministry of Trade, Industry and Energy and the Korea International Trade Association (KITA) on Nov. 9. Korean semiconductor exports to China are expected to swell 3.8 percent on year in October.

Samsung Electronics and SK Hynix were expected to suffer a drop in exports to China from October as the Trump administration's semiconductor export regulations against Huawei came into effect on Sep. 15. However, China's demand for semiconductors has been growing as the COVID-19 outbreak has subsided in China faster than in other regions, and smartphone makers in China other than Huawei have ramped up their shares of the Chinese market.

The semiconductor sector is not the only one that relies heavily on China. During the same period, Korean petrochemical companies depended on China for 43.3 percent of their exports, the survey showed. In the case of precision machinery exports, the dependence hit 63.64 percent. The need to diversify overseas markets has grown as the U.S.-China conflict could negatively affect Korea's exports. But Corporate Korea has not been able to break away from its heavy dependence on the Chinese market.

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