Korean Economy News
S. Korea’s chip exports to India surge on strong smartphone demand

Lim Sung-hyun and Lee Eun-joo

South Korea’s semiconductor exports to India surged almost 50 percent in the first four months of this year from the same period a year ago, thanks to exploding demand for smartphones in the world’s second most populous country.

According to data released by Korea International Trade Association (KITA) on Sunday, Korea exported a total $490 million worth of semiconductors to India in the January-April period, up 48.5 percent from the same period a year ago. The surge is notable because Korea’s overall semiconductor outbound shipments fell 19.5 percent to $31.62 billion during the same period.

Data from the Ministry of Trade, Industry and Energy also showed earlier this month that Korea’s semiconductor exports to India based on declaration jumped 38.4 percent on year to $110 million in May. During the same time, the country’s total chip exports plunged 30.5 percent. In particular, exports to China skid 38.7 percent while to the U.S. 24.7 percent and to the Association of Southeast Asian Nations 14.6 percent, data showed.

Korea’s chip exports have been on the steady fall since late last year with subdued global demand for smartphones. Escalating trade tensions between the United States and China, the world’s two biggest economies, have also heightened uncertainty over the global economy.

The Korean trade ministry attributed strong demand for semiconductors in India to brisk sales of Korean smartphones in the world’s second-most populous country. Sales of smartphones manufactured at Samsung Electronics Co.’s production facility in Noida, India, has jumped following the launch of the Korean smartphone giant’s Galaxy A series in March. Sales of the Galaxy A series exceeded 5 million units in just 70 days after its launch, accounting for 70 percent of Samsung Electronics’ total smartphone shipments to India in the first quarter ended March this year.

The trade ministry also noted that overall production of smartphones manufactured by other companies also surged amid growing demand for smartphones in India, leading to increased shipments of semiconductors from Korea. According to India Cellular and Electronics Association, the number of handset manufacturing factories surged from two in 2014 to 268 last year.

KITA data showed that India’s annual increase in semiconductor imports averaged 4 percent from 2009 to 2017, while Korea’s chip shipments to the country surged by a compound annual growth rate of 39.2 percent during the same period.

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