[New York = E-Daily Seong Joowon Correspondent] Minister of Finance and Economy Lee Hyung-il predicted that the global semiconductor boom will continue at least through next year. Although semiconductor stocks have plummeted recently due to concerns over interest rate hikes and intensifying competition from Chinese companies, he believes the growth trend can continue because demand still significantly outpaces supply.

In an interview with CNBC on the 17th (local time) while attending the International Monetary Fund (IMF) and World Bank (WB) Annual Meetings in Bangkok, Thailand, Minister Lee stated, “Our assessment is that, as things stand, this growth trend can be maintained at least through next year.”
He explained, “This is because the gap between semiconductor supply and demand remains very large,” adding, “Supply capacity is also continuing to expand.” This implies that, as semiconductor manufacturers are increasing their production capacity but the imbalance between supply and demand has not yet been resolved, the favorable business conditions are likely to continue for the time being.
Minister Lee’s remarks came amid a recent sharp decline in global semiconductor stocks. According to CNBC, semiconductor stocks plummeted this week due to investor concerns over potential interest rate hikes and increased competition from Chinese companies. Major semiconductor firms—including South Korea’s SK hynix(000660)and SEOUL SEMICONDUCTOR CO., LTD.—were swept up in the sell-off.
Regardless of the growth outlook for the semiconductor industry, volatility in the stock market is on the rise. Minister Lee cited the semiconductor industry’s larger share of the economy compared to other countries as a reason for the increased volatility in the South Korean stock market this year.
He explained that price movements in semiconductor-related stocks have a relatively large impact on the South Korean stock market as a whole. However, Minister Lee assessed that despite this market volatility, the fundamentals of the South Korean economy remain “solid.”
Some market observers have raised concerns that a semiconductor supply glut could emerge as the investment boom in artificial intelligence (AI) slows down. However, Minister Lee predicted that the situation where semiconductor demand significantly outpaces supply would continue at least through next year.
He also predicted that the semiconductor boom would have a positive impact on the South Korean government’s fiscal conditions. He explained that improved performance in the semiconductor industry would lead to increased tax revenue, enabling the government to collect more taxes this year than originally anticipated.