South Korea sees chip boom lasting through 2027 amid tight supply

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Korea chip boom outlook

Highlights

South Korean Finance Minister Lee Hyoung-Il projects the semiconductor boom to last through 2027 due to persistent demand-supply imbalance and ongoing capacity expansion.
Global semiconductor stocks, including SK Hynix, Seoul Semiconductor, and Nvidia, fell sharply this week amid interest rate hike concerns and increased Chinese competition.
Lee states that the chip upcycle will boost South Korea's tax collections beyond projections for 2024 and strengthen the country's fiscal position.

Minister outlines chip cycle outlook

As reported by CNBC, South Korean Finance Minister Lee Hyoung-Il says the semiconductor boom will last at least through 2027 because supply is still catching up with demand. Speaking on the sidelines of the IMF-World Bank annual meetings in Bangkok, he says the gap between demand and supply for semiconductors remains very wide and capacity expansion is still underway.

His comments come as global semiconductor stocks fall sharply this week, pressured by investor concerns over interest rate hikes and rising competition from Chinese companies. South Korean names including SK Hynix and Seoul Semiconductor are part of the sell-off, alongside U.S. chip companies such as Nvidia.

Market volatility and fiscal effects

Lee says chip stocks have fueled volatility in South Korea’s stock market this year because the semiconductor industry accounts for a larger share of the economy than it does in many other countries. Even so, he describes the broader economy as solid despite the market’s sharp swings.

The minister also says the chip upcycle is helping government finances, with tax collections expected to exceed initial projections this year. He adds that South Korea will ultimately be in a stronger fiscal position because of the semiconductor boom.

That view contrasts with a more cautious tone in an opinion column published on Thursday by Maeil Business Newspaper, which urges the government to prepare for a future slowdown in the artificial intelligence boom. Citing two experts, the column says a flood of new semiconductor supply could turn the memory market into a "red ocean" by 2029.

Our earlier article on Micron Technology’s weakening share momentum highlighted a bearish technical setup after the stock slipped below a rising-wedge pattern on the weekly chart. We noted that fading RSI and MACD signals pointed to possible downside targets unless Micron reclaimed key resistance levels, underscoring how quickly sentiment can turn across chipmakers during broader tech pullbacks.

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