It was found on the 3rd that manufacturing output in the first quarter of this year rose 3.0% from the previous quarter. The increase was the largest in five years for a first quarter since the fourth quarter of 2020 (3.6%). However, the manufacturing output growth rate excluding semiconductors was only 0.2%.
According to the Korean Statistical Information Service (KOSIS) and the industrial activity trend on the day, first-quarter semiconductor production increased 14.1% from the previous quarter. The production growth rate was the highest since the second quarter of 2023 (19.0%).
However, production in other manufacturing sectors excluding semiconductors increased only 0.2%. Although it rose after declines in the third quarter (-0.2%) and fourth quarter (-0.5%) of last year, it remains at a low level.
As a result, resolving the "K-shaped polarization" has become a key task for the government. Unlike the heavy and chemical industries that broadly drove Korea's economy in the past, semiconductors do not have large job creation or output multiplier effects. Thus, while economic indicators look favorable thanks to a semiconductor boom, people are finding it hard to feel that their household finances have improved accordingly.
And because the government or corporations did not anticipate a semiconductor boom at the current level, an economic downturn could also arrive abruptly. In that case, given the high economic dependence, not only certain companies but the Korean economy overall could take a heavy hit.
The government plans to foster new growth industries such as artificial intelligence (AI) and robots to overcome K-shaped polarization. The government is also urging corporations not to remain in the current situation but to innovate.
Koo Yun-cheol, Deputy Prime Minister for Economic Affairs and Minister of Strategy and Finance, met with presidents of major corporations on the 24th of last month and said, "Please continue to push innovation upon innovation so that second and third semiconductor industries can emerge for our economy," and "Our corporations should not rest on their current achievements but leap forward as global hyper-innovative corporations."