"Semiconductor Price Increase and Supply Shortage Worsen Business Conditions for Electronics and Car Companies"

[Asia Economy Reporter Jeong Hyunjin] The perceived business conditions of electronics and automotive companies have worsened due to the global rise in memory semiconductor prices and the shortage of automotive semiconductor supply.

According to the Business Survey Index (BSI) conducted by the Korea Economic Research Institute under the Federation of Korean Industries targeting the top 600 companies by sales, the manufacturing BSI outlook for April recorded 109.0, down 5 points from the previous month. Although it exceeded the baseline of 100, indicating a positive economic outlook, the growth momentum has slowed.

(Data = Korea Economic Research Institute under the Federation of Korean Industries)

In particular, the electronics and telecommunications equipment and automotive sectors, which are key domestic industries, were recorded below the baseline at 90.9 and 97.4 respectively, falling 20.6 points and 11.4 points compared to the previous month. The Korea Economic Research Institute explained, "Due to the recent global rise in memory semiconductor prices and the shortage of automotive semiconductor supply, electronics and automotive companies are experiencing difficulties in securing core components, which appears to have worsened the perceived business conditions."

The comprehensive business BSI outlook for April was 106.0. It exceeded the 100 mark for two consecutive months due to the recovery in domestic and foreign demand but fell 3.2 points compared to the previous month. The comprehensive business BSI actual figure for March was 112.9, rising 14.9 points from the previous month thanks to the base effect from the Lunar New Year holidays and an increase in new orders. The non-manufacturing perceived business condition was 102.2, maintaining the previous month's level.

Looking at the BSI outlook by sector, most sectors including domestic demand (106.5), exports (103.3), investment (99.4), employment (102.6), financial conditions (101.4), profitability (101.4), and inventory (98.6) showed positive outlooks by exceeding the baseline, according to the Korea Economic Research Institute. However, investment remained at last month's level (99.5), indicating a somewhat negative outlook. The institute stated, "Due to the recent sharp rise in prices of major raw materials such as crude oil and copper, some companies' profitability has deteriorated, leading to a reduction in new investments or delays in investment execution."

Choo Kwang-ho, Director of Economic Policy at the Korea Economic Research Institute, said, "Although corporate perceived business conditions show a positive trend, uncertainties in the manufacturing sector are increasing due to recent semiconductor supply shortages causing production disruptions and rising raw material prices," adding, "Measures should be devised to enhance corporate economic vitality so that the positive economic trend can continue."

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