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AI Spending Slowdown Threatens $100B Export Hit
27 Oct
Summary
- South Korea's chip exports may drop by $50B-$100B.
- A 10% decline in chip prices is assumed in the scenario.
- US tech firms' AI capital expenditure is projected to reach $110B next year.
South Korea faces a potential economic blow of $50 billion to $100 billion in semiconductor exports if US tech giants scale back their artificial intelligence investments next year. The Bank of Korea modeled this pessimistic scenario, revealing significant economic vulnerability.
This forecast assumes a 10% decrease in semiconductor unit prices, which could reduce the country's GDP growth by approximately 0.4 percentage point. The situation underscores South Korea's substantial dependence on its chip industry, accounting for nearly half of its exports.
Major US technology firms like Amazon, Google, Microsoft, Meta, and Oracle have seen their combined capital expenditure on AI surge. This spending escalated from $40 billion last year to an estimated $80 billion this year, with projections indicating a rise to $110 billion next year. However, the central bank acknowledges uncertainty regarding future AI demand and the memory chip market cycle.
