South Korea’s Semiconductor Exports Shift as Dependence on China Declines

In 2024, South Korea’s semiconductor exports reached a record $141.9 billion, according to the Ministry of Trade, Industry, and Energy. (Image courtesy of Yonhap)

SEJONG, Jan. 6 (Korea Bizwire) — South Korea’s semiconductor export landscape has undergone a significant transformation in recent years, with reliance on China decreasing and exports to countries like Taiwan, the United States, and Vietnam increasing.

Experts attribute the shift to global market dynamics driven by the U.S.-China semiconductor rivalry, the surge in demand for artificial intelligence (AI) technologies, and efforts by global IT manufacturers to reduce dependence on China.

In 2024, South Korea’s semiconductor exports reached a record $141.9 billion, according to the Ministry of Trade, Industry, and Energy. While China and Hong Kong remained key markets, their combined share of South Korean semiconductor exports fell from 61.1% in 2020 to 51.7% in 2024.

Growing Export Markets: Taiwan, U.S., and Vietnam

Exports to Taiwan saw a dramatic rise, increasing from 6.4% of total exports in 2020 to 14.5% in 2024. This surge was driven primarily by high-bandwidth memory (HBM) chips supplied by SK Hynix to Nvidia via Taiwan’s TSMC, a critical manufacturing hub for AI accelerators.

The U.S. maintained a steady share of around 7.2%, but when combined with Taiwan, which serves as an intermediary for U.S. companies, the effective share of exports linked to the U.S. rose to 21.7% in 2024, up from 13.9% in 2020.

Vietnam also emerged as a growing market, accounting for 12.9% of South Korea’s semiconductor exports in 2024, up from 11.6% in 2020. This growth was largely influenced by Samsung Electronics relocating its smartphone manufacturing operations from China to Vietnam.

The Decline of China’s Dominance

China’s direct share of South Korean semiconductor exports dropped from 40.2% in 2020 to 33.3% in 2024, with Hong Kong’s share decreasing from 20.9% to 18.4%. Analysts noted that much of the semiconductors exported to Hong Kong are ultimately re-exported to China, reflecting the country’s continued but declining importance.

The shift away from China is expected to accelerate as global manufacturers diversify production bases to Southeast Asia and India, and as China advances its domestic semiconductor capabilities.

Implications for South Korea’s Semiconductor Industry

Experts view the diversification of South Korea’s export markets as a positive development. “The reduced reliance on China and increased exports to regions like Southeast Asia, the U.S., and India reflect a broader reorganization of global supply chains,” said Kim Yang-pang, a researcher at the Korea Institute for Industrial Economics and Trade.

“This diversification aligns with the ongoing decoupling between China and other major economies, which will likely continue to reshape the global semiconductor market,” he added.

Jang Sang-sik, head of the International Trade Research Institute at the Korea International Trade Association, emphasized that South Korea’s semiconductor industry must adapt to these changes.

“As the global semiconductor industry becomes more fragmented and competitive, South Korea must further expand its export markets beyond China to sustain long-term growth,” he said.

With the U.S.-led AI boom and the broader push to reduce dependence on Chinese manufacturing, South Korea’s semiconductor exports are expected to continue evolving, offering both challenges and opportunities for the industry. 

Kevin Lee (kevinlee@koreabizwire.com)

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