사진 확대

South Korea’s mainstay industries, including semiconductors, automobiles, and steel, are expected to face simultaneous downturns in 2025.

According to a report published by the Bank of Korea (BOK) on Wednesday, the country’s major industries are projected to struggle this year, except for shipbuilding and mobile phones.

The shipbuilding sector has entered a supercycle and mobile phone industry is expected to benefit from new product releases.

The outlook for Korea’s largest export item, semiconductors, is particularly bleak.

“Weak demand for general-purpose semiconductors and base effects will slow the overall growth of semiconductor exports in the first quarter,” the report said. “Also, there is an increased policy uncertainty surrounding the semiconductor industry under the Trump administration, leading to downside risks for the domestic industry.”

Another key challenge for the industry is the aggressive price competition from Chinese semiconductor manufacturers.

The report highlights that “in the case of DRAM, the impact of Chinese memory semiconductor firms‘ low-price strategies has spread even to high-performance DRAM, accelerating price declines across all specifications.”

The fixed price of DDR5 16Gb DRAM plunged to $3.75 by the end of January 2025 from $4.65 in June 2024.

NAND flash prices have also halved from their peak.

“Demand for artificial intelligence (AI) semiconductors is expected to remain robust as big tech companies continue investing in data centers this year,” the report noted. “However, weak demand for general-purpose memory semiconductors, oversupply in the NAND flash market, and delays in the release of next-generation AI chips will collectively weaken overall industry growth compared to 2024.”

The outlook for the automobile industry is also pessimistic.

The BOK expects a modest recovery in domestic demand due to base effects from poor performance in 2024 and temporary reductions in the individual consumption tax, but sees exports are likely to suffer.

The report pointed to weak sales in Europe and the expansion of local production in response to U.S. protectionist policies as major factors that will weigh on exports.

“Despite a mild recovery in domestic auto sales, overall production is expected to decline due to sluggish exports,” it said.

The petrochemical sector, already in severe distress, is expected to face its most challenging year.

The BOK cited “delays in the global manufacturing recovery and oversupply issues” as key reasons for the continued slump in both domestic and international demand for petrochemical products.

The report further warned that “negative conditions will persist in the mid-to-long term, making it difficult for major Korean firms to improve their business performance.”

The steel, display, and secondary battery sectors are also projected to struggle.

Steel, in particular, is facing a triple whammy of sluggish domestic construction demand, a delayed recovery in China’s real estate market, and Trump’s tariff risks.

The shipbuilding industry, on the other hand, is expected to emerge as a key area of optimism.

The report noted that a new U.S. legislative proposal that calls for outsourcing the construction and maintenance of both commercial ships and naval vessels to allied nations will significantly benefit Korean shipbuilders.

“The second Trump administration’s energy policies favoring fossil fuels, efforts to expand naval power, and measures to counter China’s shipbuilding dominance will positively impact Korea’s shipbuilding industry,” it said.

The U.S. administration’s proposed 25 percent tariffs on automobiles, semiconductors, and pharmaceuticals, in the meantime, could deal a significant blow to Korean exports and gross domestic product (GDP).

According to the Industrial Bank of Korea’s Economic Research Institute, a blanket 25 percent tariff would increase the country’s semiconductor exports to the United States by 1.01 percent, but decrease automobile exports by 18.59 percent and pharmaceutical exports by 7.37 percent.

Korea’s exports to the U.S. in 2024 amounted to $34.7 billion in automobiles, $10.6 billion in semiconductors, and $1.5 billion in pharmaceuticals.

With the new tariffs, total exports to the U.S. from these three industries are estimated to shrink by $6.5 billion.

As risks mount across Korea’s key industries, the Korean government is taking steps to mitigate the impact of potential U.S. tariffs by examining non-tariff barriers that the U.S. has consistently raised concerns about.

Trump has justified his move to impose reciprocal tariffs by citing various non-tariff barriers in other countries, such as government subsidies and value-added tax policies.

The 2024 U.S. trade barriers report highlighted several issues related to Korea, including restrictions on beef imports for cattle under 30 months old, a lack of detailed guidelines in chemical substance management regulations, import restrictions on blueberries, cherries, and apples, and limits on foreign law firms’ ownership stakes in Korea.