Bank of Korea Warns: If AI Capital Expenditure Slows, South Korea's Chip Exports Could Drop by $100 Billion

October 27 - According to Reuters, the Bank of Korea warned that if major US tech companies slow down capital expenditures in the artificial intelligence (AI) sector next year, South Korea's semiconductor exports could decrease by $50 billion to $100 billion compared to previous forecasts.

The Bank of Korea simulated this pessimistic scenario in a written response submitted to lawmaker Ahn Do-geol, assuming a 10% drop in the unit price of South Korean semiconductor products. Under this scenario, South Korea's GDP growth rate in 2027 would decrease by about 0.4 percentage points, and the current account surplus would also be far below the previously preliminary forecast of $430 billion.

South Korea's economy is highly dependent on semiconductor exports, with chip export value accounting for about half of the country's total exports. Meanwhile, the capital expenditures of five US tech companies—Amazon, Google, Microsoft, Meta, and Oracle—are expected to increase from $40 billion last year to $80 billion this year, and reach $110 billion next year.

The Bank of Korea pointed out that there is still significant uncertainty in AI demand trends and the memory chip industry cycle. If tech giants cut AI infrastructure investment, South Korea's chip exports and overall economic growth could both be impacted.