Exports Down 18.6% in Early April Due to COVID-19... "Even Semiconductors? Facing a Dead End" (Comprehensive)

KCS Announces 'April 1-10 Export and Import Status'
Exports $12.2 Billion, COVID-19 Pandemic Shock
Even Semiconductors, Which Had Performed Well, Down 1.5%
"Urgent Support Needed Starting with SMEs and Mid-sized Companies"

[Asia Economy reporters Changhwan Lee, Bokyung Kim, Chaeseok Moon] South Korea's early April exports plummeted nearly 19% compared to last year due to the adverse effects of the novel coronavirus disease (COVID-19). The global demand decline caused by the COVID-19 pandemic even impacted semiconductor exports, which had been a reliable sector, casting a shadow over April's export performance.

According to the Korea Customs Service on the 13th, the export value from April 1 to 10 (provisional customs clearance basis) was $12.2 billion, down 18.6% ($2.8 billion) from the same period last year. The global spread of COVID-19, sluggish trade, economic slowdown, and falling oil prices negatively affected South Korea's exports. The number of working days was the same as last year (8.5 days).

During this period, all major export items and countries turned negative, highlighting the shockwave of COVID-19. By product, most major items decreased, including semiconductors (-1.5%), passenger cars (-7.1%), petroleum products (-47.7%), wireless communication devices (-23.1%), and automobile parts (-31.8%). By country, major destinations such as China (-10.2%), the United States (-3.4%), the European Union (EU, -20.1%), Vietnam (-25.1%), and Japan (-7.0%) also showed declines.

In particular, even semiconductor exports, which had served as a pillar, are showing signs of weakening. Semiconductor exports, which increased by 9.4% year-on-year in February, held up until last month. Although semiconductor export value decreased by 2.7% compared to the previous month due to the base effect of March last year, which recorded the highest value of the year, export volume increased by 27.0% year-on-year.

[Image source=Yonhap News]

However, the real shock is just beginning. COVID-19 is spreading uncontrollably in major export countries such as the United States and Europe. Market research firm IC Insights forecasts the global semiconductor market size to shrink by 4% to $345.8 billion this year compared to last year. IC Insights had initially projected an 8% growth in the semiconductor market in January but lowered it to 3% last month. Now, within a month, they have significantly revised the forecast downward again.

Another market research firm, Gartner, also predicts the global semiconductor market will contract by 0.9% compared to last year. Although the expansion of remote work, online education, and server upgrades by major IT companies like Google and Amazon drove semiconductor demand, these appear to be only temporary boosts.

Professor Insu Kang of Sookmyung Women's University said, "As global consumption contracts severely, it inevitably negatively impacts our exports. While the semiconductor market needs to be observed further, if demand decreases and non-memory exports also decline, we will be in a truly 'dire strait'."

Professor Yoon Heo of Sogang University advised, "Due to the shock of falling oil prices, petroleum product exports have plummeted, and automobile parts exports have been braked by the consumption cliff in the US, China, and the EU, creating an emergency situation. The government needs to support industries with strong pandemic shock intensity and significant employment effects, especially providing swift assistance to self-employed individuals and small to medium-sized enterprises that lack the capacity to devise self-help measures."

This content was produced with the assistance of AI translation services.