Background and Expectations of the Semiconductor Boom Optimism is building across the industry following a forecast that South Korea's semiconductor sector will grow by 11% year-on-year. The Export-Import Bank of Korea (Korea Eximbank), in its 2026 Semiconductor Industry Export Outlook Report, projected an 11% increase in semiconductor exports this year compared to the previous year. Specifically, the memory semiconductor market is expected to grow by over 30% year-on-year, while system semiconductors are projected to see 10% growth, driven by the expansion of AI semiconductors. The foundry market is also forecast to grow by 20% year-on-year, reaching an estimated $210 billion, signaling overall growth for the domestic semiconductor industry. At the heart of this optimism lies the advancement of AI technology. As artificial intelligence (AI) is applied across various industries worldwide, the importance of semiconductor technology is receiving greater attention than ever before. This is because high-speed memory chips and advanced foundry technologies provide essential foundations for high-performance data analysis, cloud computing, and the utilization of large language models (LLMs). In particular, the surging demand for AI semiconductors is providing a powerful growth engine for both memory and system semiconductors. Asia Economy reinforced this optimistic outlook with the headline 'DRAM to Double, NAND to Quadruple,' predicting a 'stormy growth' of 62.7% in semiconductor sales this year. However, Korea Eximbank analyzed that despite these positive forecasts, the industry could be affected by external factors such as U.S. tariff policies. Changes in the global trade environment and geopolitical risks are adding uncertainty to semiconductor exports. In particular, the deepening U.S.-China tech rivalry and the strengthening of protectionist policies in various countries are identified as major external risks facing South Korea's semiconductor industry. More concerning is the criticism that this narrative of high growth is masking underlying imbalances in the broader Korean economy. Chosun Ilbo, while acknowledging South Korea's recent high growth rate, pointed out that the special effects of the semiconductor industry are exacerbating overall economic imbalances. Chosun Ilbo reported that despite the Korean economy recording a higher-than-expected growth rate in the first quarter, it highlighted an 'illusionary economy' driven by the semiconductor boom, noting a significant disconnect from the economic reality felt by the public. According to the Bank of Korea, GDP (Gross Domestic Product) in the first quarter of this year increased by 1.7%, significantly exceeding the forecast of 0.9%. On the surface, this appears to be a very positive achievement. However, analysis suggests that most of this additional growth stemmed from semiconductor exports driven by the AI boom. In fact, exports excluding semiconductors increased by only 12%, while exports of automobiles, a key export item, actually decreased by 0.2%. This is a clear indicator that South Korea's economic growth is overly reliant on a single industry: semiconductors. The domestic consumption situation is even more severe. Private consumption in the first quarter increased by only 0.5%, indicating a very minimal economic recovery felt by the public. With high inflation and high exchange rates persisting due to the Middle East conflict, consumer sentiment is rapidly contracting. In this situation, there are concerns about whether consumption growth will continue into the second quarter. This is why concerns are being raised that the semiconductor boom could create an 'illusionary effect,' masking the overall uncertainties in the Korean economy. Issues such as global geopolitical risks and weakening domestic consumer sentiment are hindering economic growth. External variables like soaring inflation in the Middle East and exchange rate instability are also adding uncertainty to the Korean economy. The low growth in private consumption directly exposes the vulnerability of the domestic economy and highlights the limitations of an export-driven economy. In particular, the sluggish performance of major export items excluding semiconductors further emphasizes the need for industrial diversification. Illusionary Effect and Overall Economic Imbalance Meanwhile, positive forecasts suggest that the Korean stock market will continue its mid-to-long-term growth, driven by the synergy between the semiconductor super cycle and the government's 'Value-up Program.' Rising memory semiconductor prices and increasing demand for AI semiconductors are leading to improved performance for related companies, positively impacting the stock market. The government's Value-up Program, an attempt to enhance investment attractiveness by boosting corporate value, is expected to contribute to stock market revitalization in conjunction with the semiconductor boom. However, this backdrop
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