South Korean chip exports face growing competition from China, Malaysia

Seoul, Dec 16 (IANS) South Korea's semiconductor exports face growing threats from China, Taiwan and Malaysia amid intensifying global competition in advanced industries, an industry report showed on Monday.

The report from the Korea Trade-Investment Promotion Agency, better known as KOTRA, on the export similarity index (ESI) for semiconductors showed China as being South Korea's top competitor in the sector, with an ESI score of 72.2 in the third quarter of the year.

Taiwan's ESI with South Korea in semiconductors rose significantly, increasing 7.6 points over four years to reach 32.5, the largest growth among major semiconductor exporters, reports Yonhap news agency.

Malaysia's ESI increased 6 points to 50.5 over the same period, marking the second-highest growth after Taiwan.

KOTRA noted that Malaysia has emerged as a notable competitor, ranking fifth globally in semiconductor exports and handling 13 per cent of the world's semiconductor assembly, testing and packaging processes.

The report highlighted concerns that South Korea's failure to secure a technological edge over competitors could weaken its export competitiveness in the sector.

"This is a critical time to leverage technological strengths to expand South Korea's market share in export sectors," KOTRA said in the report, adding, "South Korean firms must urgently prepare strategies to strengthen their export competitiveness."

Meanwhile, South Korea's exports grew 12.4 per cent from a year earlier in the first 10 days of this month on strong shipments of semiconductors, data showed on Wednesday.

Outbound shipments reached $17.6 billion in the December 1-10 period, compared with $15.6 billion tallied a year earlier, according to the data from the Korea Customs Service.

Imports gained 11.6 per cent on-year to $19.1 billion, resulting in a trade deficit of $1.55 billion.

Adjusted for the number of working days, daily average exports increased 5 percent on-year to $2.34 billion, the agency said. This year's period included 7.5 working days, compared with 7 working days over the same timeframe last year.

"Our exports continue to show upward momentum as both the total and daily average exports have increased compared to the same period last year," said Jo Eek-no, director general for international trade policy at the industry ministry.

Exports of semiconductors surged 43 per cent on-year to $3.61 billion over the cited period.