Korean Semiconductors Hit by Huawei Sanctions... China Accounts for 41% of Exports

Semiconductor Exports to China Account for 41.1%
Hong Kong Ranks Second at 20.8%

[Asia Economy Reporter Hwang Yoon-joo] As the United States' additional sanctions on Huawei, China's largest telecommunications company, take effect on the 15th, the domestic semiconductor and display industries will also cease transactions with Huawei. Attention is focused on how this will affect the semiconductor exports of domestic companies such as Samsung Electronics and SK Hynix in the future.

According to statistics from the Korea International Trade Association on the 15th, among South Korea's semiconductor exports totaling $54.74 billion from January to July, exports to China amounted to $22.489 billion. This accounts for 41.1% of the total export value, representing the highest export share.

The country with the second-highest share of semiconductor exports is Hong Kong. During this period, exports to Hong Kong reached $11.375 billion, accounting for 20.8% of the export share. The volume exported to Hong Kong includes shipments that pass through Hong Kong en route to China. This implies that the actual volume of South Korean semiconductor exports destined for China may be higher than the official statistics.

During the same period, exports of flat panel displays and sensors to China amounted to $3.822 billion, representing a 43.7% export share. This is the second-highest share following Vietnam (44.5%).

The semiconductor industry expects short-term export setbacks due to the U.S. government's sanctions on Huawei. It is known that Huawei has stockpiled a large amount of key semiconductor components. If the export ban continues for one year, it is estimated that there will be a sales shortfall of 10 trillion won annually. Last year, South Korea's total semiconductor export volume was $93.93 billion (approximately 112 trillion won).

However, there are also views that if exports to companies other than Huawei increase, the impact on domestic companies will not be significant.