South Korea’s semiconductor exports could fall by $50 billion to $100 billion against earlier forecasts if major US technology firms slow their artificial intelligence spending next year, the Bank of Korea warned in a written response to a lawmaker, Reuters reported on October 27. The central bank modelled a “pessimistic scenario” in which a sudden export shortfall shaves about 0.4 percentage points off South Korea’s GDP growth next year and pushes its current-account surplus well below the projected $430 billion for 2027. The scenario assumes a 10% decline in Korean semiconductor unit prices. The warning is a modelled downside case, not a forecast that spending will slow.
The Pessimistic Scenario In Numbers
The Bank of Korea submitted its assessment in a written response to lawmaker Ahn Do-geol, according to Reuters. Under the pessimistic scenario, the export shortfall would cut about 0.4 percentage points from next year’s GDP growth rate, while the current-account surplus would fall well below the central bank’s initial projection of $430 billion for 2027. The scenario’s central assumption is a 10% decline in Korean semiconductor unit prices.
The range itself is wide, from $50 billion to $100 billion, and the bank presents it as a scenario to assess the economic fallout if US tech giants curb their aggressive infrastructure outlays, rather than as a prediction. That distinction matters: nothing in the response says the spending slowdown has begun, only what it would cost if it came.
Why Korea Is Exposed
The assessment underscores how heavily South Korea relies on chips, which account for roughly half of its exports, Reuters reports. The demand side of that exposure is concentrated in five US firms: combined capital expenditure by Amazon, Google, Microsoft, Meta and Oracle has grown from $40 billion last year to an estimated $80 billion this year, and is projected to reach $110 billion next year.
That spending surge is the engine behind the current chip cycle, and it is also the vulnerability. If those five firms slow their outlays, Korean exporters feel it directly through both volumes and prices, which is why the bank’s scenario pairs an export shortfall with a 10% price decline. The same AI hardware boom has driven deals such as banks lining up $63 billion to finance Broadcom chips for Anthropic, and Korean memory makers sit on the other side of it, as in Samsung’s reported use of TSMC’s 3nm process for Nvidia memory.
Why It Matters
The warning matters because it puts a number on the other side of the AI spending boom. Markets have treated the five firms’ rising capital expenditure as a demand guarantee for chip exporters, and the Bank of Korea’s scenario shows how quickly that guarantee could reverse into a $50 billion to $100 billion export hole, with a measurable cost to national growth. The bank’s caution about uncertainty cuts both ways: AI demand and the memory-chip cycle could stay strong, but neither is assured.
For chip exporters and their investors, the scenario is a reminder that exposure to AI infrastructure spending is exposure to five companies’ budgets. A slowdown would arrive through prices as well as orders, and the current-account consequences would follow, since chips make up about half of everything South Korea sells abroad.
Background
South Korea’s economy has long leaned on semiconductors as its largest export category, and the AI infrastructure boom has deepened that dependence by tying memory and logic-chip demand to the data-centre budgets of a handful of US technology firms. Central banks routinely model downside scenarios for lawmakers, and this response follows that pattern, using a price decline and a spending slowdown to size a risk rather than to announce a change in policy.
Source: Bank of Korea chip warning
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