South Korean Media: Bank of Korea Rejects 'Semiconductor Peak' Claim: 'Supply Expansion Slower Than Demand Growth'
The Bank of Korea has refuted recent widespread claims that the semiconductor boom has reached its peak.
According to a written response submitted by the Bank of Korea to Rep. Park Seong-hoon of the People Power Party on the 13th, the central bank assesses that "the global semiconductor market is expected to maintain an expansionary trend for a considerable period."
The Bank of Korea stated, "Semiconductor demand has surged due to investments in AI infrastructure, but supply expansion has been relatively sluggish," citing a supply-driven market condition as the reason why the semiconductor cycle has not yet shown signs of reversing.
The central bank further commented, "The technical complexity involved in high-performance products requires a significant amount of time for mass production," and noted that "the dominance of order-based products such as high-bandwidth memory (HBM) limits the speed of supply expansion compared to past periods."
Regarding semiconductor demand, the Bank emphasized, "A key difference between this expansion phase and previous ones lies in the anticipated fundamental transformation of the industrial ecosystem driven by AI adoption, with competitive corporate investments leading this trend."
The Bank analyzed that "current semiconductor prosperity is being strongly propelled by sustained robust global investment in AI infrastructure—including data centers—and is exhibiting momentum far exceeding past expansion cycles."
The Bank also pointed out that the current semiconductor expansion has now lasted for 40 months since March 2023, surpassing the average duration of five prior expansion phases from 2000 to 2020, which was 29 months.
By referencing opinions from overseas investment banks (IBs), the Bank of Korea reiterated that the semiconductor expansion remains valid, stating there is still uncertainty regarding the pace, scope, and profitability of AI technology diffusion—but that major investment banks including JPMorgan, Goldman Sachs, and Morgan Stanley generally forecast that the global semiconductor market will remain strong at least through next year.
This is interpreted as a further advancement from the Bank’s earlier assessment that semiconductor expansion would continue into this year.
Previously, Lee Ji-ho (a deputy assistant governor at the time, serving as Director of Research) said during an economic outlook briefing last November, "The semiconductor cycle will likely continue for some time into next year (2026)," adding, "Whether it can extend into 2027? Honestly, we’re not certain yet."
Former Bank of Korea Governor Lee Chang-young also stated in January this year during a press meeting, "Regardless of who emerges as the winner in the AI industry, semiconductors are essential," and added, "I believe the sector’s prospects remain favorable for at least another year."
Source: JoongAng Ilbo
Original article: toutiao.com/article/1870592068630528/
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