Kaitou Macro: South Korea's Chip-Driven Prosperity May Lose Momentum by 2028

Marcel Thieliant from Capital Economics stated that although there are upward risks to recent GDP growth, South Korea's semiconductor-driven economic boom may lose momentum within two years. The economist anticipates that the U.S. AI investment craze will lose steam by 2028, which could prompt Korean chip manufacturers to begin cutting capital expenditures due to the industry's high cyclicality. Thieliant noted that Samsung Electronics and SK Hynix announced a combined investment plan of 80 trillion won to build new chip manufacturing facilities in the southwestern part of South Korea, although the timeline has not been disclosed. He pointed out that with the reversal of the post-pandemic electronics boom, SK Hynix reduced its capital expenditure by two-thirds in 2023.