A new report by South Korea’s Trade-Investment Promotion Agency (KOTRA), suggests that the country’s semiconductor sector is facing stronger competition from its regional neighbours. Mainly, China, Taiwan and Malaysia.
“This is a critical time to leverage technological strengths to expand South Korea’s market share in export sectors,” the report outlined. It warned that, if the country didn’t gain a more solid technological advantage in the region, its export sector’s competitiveness could decrease.
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Measuring the countries on an export similarity index (ESI), it found that China is the country’s top competitor in the semiconductor sector with a score of 72.2 in the third quarter of 2024.
Taiwan reached the largest growth among major semiconductor exporters, increasing 7.6 points in the last four years and reaching a score of 32.5.
Its rate of growth was followed by Malaysia’s, which has also emerged as a major player in the industry. It has grown 6 points and reached a score of 50.5 in the past four years.
Malaysia is responsible for 13% of the world’s semiconductor assembly, testing and packing processes. It ranks as the fifth-largest exporter of semiconductors in the world.
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By GlobalDataSouth Korea’s semiconductor export sector grew 12.4% in the first ten days of December compared to the same period a year ago. Exports reached $17.6bn, marking a $2bn increase from the same ten-day period in 2023.
South Korea has been in political turmoil for the last few weeks. On December 3rd, President Yoon Suk Yeol attempted to impose martial law. The move was reversed only a few hours later without a major breakout of violence. However, it did mark the unravelling of Yoon, who legislators voted to impeach this past Saturday (December 14).
The disorder has further agitated investors, who have been wary of the underperformance of South Korean markets in 2024.
