Seoul: The global semiconductor boom, significantly driven by the rising demand for artificial intelligence (AI), is expected to continue through the end of next year, according to the central bank’s recent projections. The Bank of Korea (BOK) revealed this forecast during a briefing on the economic outlook held on Thursday.
According to Yonhap News Agency, BOK official Lee Ji-ho noted that while the semiconductor cycle is traditionally around two years, the current uptrend might extend due to the global AI boom. If it persists until late 2026, its duration could mirror the IT bubble around the year 2000. The South Korean economy has been on a recovery path, bolstered by strong global demand for semiconductors, robust export performance, and improving consumer sentiment.
South Korea’s exports grew by 3.6 percent in October compared to the previous year, reaching US$59.57 billion. This marks the fifth consecutive month of export growth, despite weaker shipments to the United States amid its aggressive tariff measures. Notably, chip exports saw a significant increase, surging 25.4 percent year-on-year to $15.73 billion, setting a record high for October and marking the eighth consecutive month of growth.
Reflecting these positive trends, the BOK has revised its economic growth forecasts upward, predicting a 1 percent growth in 2025, up from the previous 0.9 percent, and a 1.8 percent growth in 2026, revised from 1.6 percent. BOK Deputy Governor Kim Woong highlighted that the semiconductor sector contributed significantly to these upward revisions, accounting for 0.05 percentage point of the 0.1 percentage-point increase in this year’s growth forecast, and 0.1 percentage point of the 0.2 percentage-point upgrade for next year.
However, the central bank cautioned against viewing the economy as entering a full-fledged recovery just yet. Excluding the IT manufacturing sector, next year’s growth rate would stand at 1.4 percent, a level considered neither strong nor sufficient, as stated by Lee. Furthermore, the BOK pointed out the weak Korean won as a pressing concern, warning that a persistently high exchange rate could exacerbate economic disparities, particularly affecting small and mid-sized businesses compared to major exporters.