[Edaily Lim Yukyung Reporter] Japan’s Asahi Shimbun assessed that while the South Korean economy is enjoying a boom in semiconductor exports, structural issues are preventing the benefits from spreading throughout the broader economy. It also pointed out that economic growth overly reliant on semiconductors could trigger “Dutch disease,” which weakens other industries, and that if the semiconductor boom continues to be concentrated among only a select few, social polarization could worsen.

On the 28th, the Asahi Shimbun published an editorial column titled “Should We Be Carried Away by the Semiconductor Boom? The Risks Facing the South Korean Economy.” The author, editorial writer Kiyohide Inada, has served twice as the Asahi Shimbun’s Seoul correspondent, covering South Korea’s economy and society.

The newspaper assessed that the Bank of Korea’s recent warning about the “Dutch disease” holds significant implications for the South Korean economic situation. The term “Dutch disease” refers to the risks faced by an economy that relies excessively on a specific industry or resource, drawing on the historical example of the Netherlands, where the expansion of North Sea natural gas exports led to a decline in the competitiveness of manufacturing and other sectors.

In a report published on the 19th of last month, the Bank of Korea warned of the possibility of the “Dutch disease” occurring, in which excessive reliance on the semiconductor industry weakens the foundations of other key industries.

The Asahi Shimbun noted that while South Korea has historically grown based on exports across various sectors, such as automobiles and steel, semiconductor-led growth has become increasingly prominent in recent years. It pointed out that semiconductor exports from January to June of this year more than doubled compared to the same period last year, reaching an all-time high and accounting for a staggering 40% of South Korea’s total exports, adding that describing this as a “semiconductor boom” is no exaggeration.

It also noted that the booming semiconductor exports have boosted the profits of Samsung Electronics and SK Hynix to unprecedented levels, and that employees at both companies, who are set to receive substantial bonuses, have every reason to feel a great sense of pride.

However, he pointed out that South Korea’s economic structure makes it difficult for the benefits of the semiconductor industry to spread to the broader economy. Since the country’s semiconductor industry relies on imports for 60% of its manufacturing equipment, even if Samsung Electronics and SK Hynix generate substantial profits, there are limits to the ripple effects on the domestic economy through investment and employment.

It further noted that if the semiconductor industry becomes overly dominant, causing talent and investment to be concentrated in one sector, it could lead to the decline of other industries.

The Asahi Shimbun also addressed the issue of polarization in South Korean society. Given the significant gaps between large corporations and small and medium-sized enterprises (SMEs), as well as between the Seoul metropolitan area and regional areas, the newspaper analyzed that if the fruits of the semiconductor boom are concentrated among a few large corporations and their employees, economic disparities could actually widen.

The newspaper added, “The more the economy is booming, the more economic policy requires long-term and steady efforts,” and concluded, “South Korea stands at a crossroads: how many people can benefit from the warmth of this boom, and how can it be transformed into the foundation for the prosperity of the next generation?”